EUR/USD Price Outlook: Euro Consolidation Looks To FOMC For Fuel

Despite the recent surge in volatility, Euro is virtually unchanged for the month of December with price continuing to trade within the confines of a multi-month consolidation range. These are the updated targets and invalidation levels that matter on the EUR/USD charts heading into FOMC interest rate decision.

EUR/USD DAILY PRICE CHART

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EUR/USD Daily Price Chart

Technical Outlook: In my latest EUR/USD Price Outlook our ‘bottom line’ noted that the price had responded to, “multi-month consolidation support and IF 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.”

Euro briefly registered a low at 1.1270 before rebounding sharply with price continuing to respect the October consolidation range ahead of tomorrow’s FOMC interest rate decision. Daily resistance stands at the 61.8% extension of the November advance at the 1.1426 confluence zone with a breach/close above the December opening-range high needed to suggest a more significant low is in place.

EUR/USD 240MIN PRICE CHART

(Click on image to enlarge)

EURUSD 240min Price Chart

Notes: A closer look at price action shows Euro trading within the confines of an ascending pitchfork formation extending of the yearly lows but it’s still too soon to rely on heavily. Look for initial support ahead of 1.1337 with the recovery still viable while above weekly open support at 1.13. Initial resistance at 1.1404backed by the monthly high at 1.1443 – a close above this level would expose subsequent objectives at 1.1472, the 100-day moving average at ~1.1490 and the 1.1515/24 confluence resistance zone.

A break below 1.1270 would invalidate the reversal play with such a scenario targeting the yearly low at 1.1215 backed by more significant support at the 61.8% retracement of the 2017 advance at 1.1186. It’s make-or-break for Euro heading into the close of the year.

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