EUR/USD Price Outlook: Euro Breakout Imminent- Battle Lines Drawn

Euro is virtually unchanged for the month of December with price continuing to trade within the confines of a multi-month consolidation structure. These are the updated targets and invalidation levels that matter on the EUR/USD charts on the heels of today’s European Central Bank (ECB) interest rate decision.

EUR/USD DAILY PRICE CHART

(Click on image to enlarge)

EUR/USD Daily Price Chart

Euro registered a low at 1.1306 this week before rebounding with the monthly opening-range still intact post-ECB. Note that the broader consolidation structure off the November range remains in focus with the broader short-bias vulnerable while above this week’s low.

EUR/USD 240MIN PRICE CHART

(Click on image to enlarge)

EUR/USD 240min Price Chart

Notes: A closer look at price action highlights sees euro continuing to trade within the confines of the ascending pitchfork formation we’ve been tracking off the yearly lows with price rebounding sharply off confluence support this week at 1.1308. Price would need to hold above the highlighted slope confluence around ~1.1320 for the advance to remains viable.

Weekly open resistance stands at 1.1390 with a breach above the December opening-range highs at 1.1443needed to validate the breakout- such a scenario targets 1.1472 backed by the 1.15-handle and more significant Fibonacci resistance at 1.1516/24.

Bottom line: Price is responding to multi-month consolidation support and IF the euro is heading higher, the price would need to stabilize here above the 1.13-handle. From a trading standpoint, I’ll favor fading weakness while above this threshold but ultimately a breach above 1.1443 is needed to suggest a larger advance is underway. A break sub-1.1308 would invalidate the rebound play and expose 1.1270 backed by critical long-term Fibonacci support at 1.1187.

EUR/USD TRADER SENTIMENT

EUR/USD Trader Sentiment

1 2
View single page >> |

Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.