EUR/USD Weekly Price Outlook: Euro Rally Targets Turn Or Burn Level

In this series, we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro broke above a multi-month consolidation range with the advance targeting key resistance just higher. Here are the key targets & invalidation levels that matter on the EUR/USD weekly chart.

EUR/USD WEEKLY PRICE CHART

(Click on image to enlarge)

EUR/USD Weekly Price Chart

Notes: In last month’s EUR/USD Weekly Technical Outlook we noted that the broader short-bias remained ‘vulnerable while above this region (1.13) heading into the close of the year.’ Euro registered a low at 1.1306 early in the month with the subsequent rally failing just ahead of key resistance this week. Note that RSI has not broken above 50 since the early-2018 breakdown – a close above would mark a change of behavior in the weekly momentum profile.

The levels remain unchanged heading deeper into January trade with critical resistance steady at 1.1586-1.1603 – a region defined by the March trendline, the 61.8% retracement and the September outside-weekly reversal close. ‘A breach/close above this threshold is needed to suggest that a more significant low is in place with such a scenario targeting subsequent topside objectives at 1.1727 and the median-line / 52-week moving average / September high at 1.1800/15.’

Bottom line: The Euro advance is targeting critical downtrend resistance around the 1.16-handle (broader bearish invalidation). From a trading standpoint, the focus remains on a stretch into this region with a close above needed to suggest that a larger turn is underway. The immediate advance looks a bit vulnerable here so look for price to stabilize above the monthly open at 1.1445 if this is going to work. I’ll publish an updated EUR/USD technical outlook once we get further clarity on near-term price action.

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