EUR/USD Technical Price Outlook: Euro Testing Lower Bounds Of Support

Euro is down more than 1.4% against the US Dollar since the January high with price now approaching multi-month uptrend support. These are the updated targets and invalidation levels that matter on the EUR/USD charts this week.

EUR/USD DAILY PRICE CHART

(Click on image to enlarge)

EUR/USD Daily Price Chart

Technical Outlook: In my latest EUR/USD Weekly Technical Outlook we noted that “Euro advance is targeting critical downtrend resistance around the 1.16-handle (broader bearish invalidation)”. Price registered a high at 1.1570 before turning lower with the decline breaking back below the yearly open at 1.1445. Note that daily momentum failed to hold above the 60-threshold and highlights the threat for further weakness.

Euro has continued to trade within the confines of an ascending pitchfork formation extending of the November low with this recent pullback now trading just above the lower 25% line of the slope. Interim resistance stands at the yearly open at 1.1445 with a breach above the high-day close at the 1.15-handle needed to mark resumption. Subsequent topside resistance objectives are eyed at the upper parallel / 61.8% retracement at 1.1586.

EUR/USD 240MIN PRICE CHART

(Click on image to enlarge)

EUR/USD 240min Price Chart

Notes: A closer look at price action shows Euro trading within a tight descending channel off the Friday high with the median-line further highlighting near-term resistance at 1.1445. A break lower from here targets the 61.8% retracement of the November advance at 1.1351 backed by the highlighted trendline confluence around 1.1320 – look for a bigger reaction there IF reached (broader bullish invalidation & an area of interest for possible long-entries).

Bottom line: The EUR/USD pullback is approaching monthly up-trend support just lower and IF price is heading higher, Euro would need to hold above slope support. From a trading standpoint, look to reduce short exposure / possible exhaustion on a move towards the lower parallel. Ultimately, a larger setback may offer more favorable long-entries closer to daily slope support.

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