Euro Technical Forecast: EUR/USD Breakout Looms- ECB on Tap

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro coiling below resistance- just above the yearly uptrend support
• EUR/USD range breakout imminent -ECB rate decision, US PPI / CPI on tap
• Resistance 1.1775, 1.1917-1.2020 (key), 1.2227- Support 1.1586, 1.1497 (key), 1.1394

The Euro is trading in a contractionary range just beneath resistance, with EUR/USD holding just above the 2025 uptrend. The setup highlights a pivotal inflection point as traders await the ECB rate decision and U.S. CPI release. A breakout from this range is likely to set the tone for the days ahead and the bulls need to clear resistance to keep the yearly advance viable. Battle lines drawn on the Euro weekly technical chart.

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Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Technical Forecast we noted that EUR/USD had rebounded off the yearly uptrend and that, “threat for a larger correction remains while below the yearly high-close. From at trading standpoint, the immediate focus is on a breakout of the 1.1497-1.1775 range for guidance.” EUR/USD has continued to contract within this range for the past four-weeks with he September opening range taking shape just below resistance. Looking for a breakout in the days ahead.

Weekly support rests with the July low-week close (LWC) at 1.1586 and is backed by the March 2020 / 2022 high at 1.1497- look for a larger reaction there IF reached with a break / weekly close below needed to suggest a more significant high is in place / a larger reversal is underway. Subsequent support seen at the April high-close / July low at 1.1392/94 and 1.1164/99.

Weekly resistance remains with the 2025 high-week close (HWC) at 1.1775. A breach / weekly close above this threshold is needed to mark resumption of the yearly uptrend with the next major technical consideration eyed at 1.1917-1.2020- a region defined by the 100% extension of the 2022 advance and the 38.2% retracement of the broader 2008 decline. Note that the upper parallel converges on this threshold into the close of the month (area of interest for possible top-side exhaustion / price inflection IF reached). Subsequent resistance objectives eyed at the 2021 HWC at 1.2227 and the 2018 high close at 1.2456.

Bottom line: Euro is in consolidation just below resistance with monthly opening-range in focus- look for a breakout of the 1.1586-1.1775 range for guidance. From at trading standpoint, losses would need to be limited to 1.1497 IF price is heading higher on this stretch with a close above this range needed to fuel the next major leg of the advance.

Keep in mind the European Central Bank (ECB) interest rate decision is on tap Thursday with the central bank largely expected to leave rate unchanged. We also get the release of key US inflation data with Core PPI & CPI data on tap tomorrow and Thursday respectively. Stay nimble into the releases and watch the weekly close here for guidance. I’ll publish an updated Euro Short-term Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

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