Euro Technical Outlook: EUR/USD Short-term Trade Levels
- EUR/USD has declined more than 4.3% from the yearly high and is pressing multi-month support for a seventh consecutive session.
- Despite repeated intraday breaches, sellers have yet to secure a decisive daily close below pivotal support at 1.1590–1.1612 – today’s close in focus
- A confirmed break beneath this floor would signal resumption of the broader downtrend, while failure to follow through could trigger a short-covering rebound.
- Key event risk ahead with Eurozone PMI & US PCE, GDP & PMI on tap tomorrow.
- Resistance 1.1612, ~1.1673 (key), 1.1727/46- Support 1.1492/97 (key), 1.1387-1.1405, 1.1355
EUR/USD continues to probe a key multi-month support zone at the yearly lows following an extended pullback from February highs. While intraday breaks have occurred, sellers have struggled to secure confirmation on a closing basis, leaving the market at a pivotal juncture. Momentum on the weekly chart has weakened to its lowest level in over a year, reinforcing the downside bias if support fails. The coming sessions are likely to determine whether this level finally gives way or whether the prolonged pressure sparks a relief bounce before the next directional move unfolds. Battle lines drawn on the Euro short-term technical charts.
Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In last month’s Euro Short-term Technical Outlook we noted that EUR/USD was testing pivotal support, “with the bears vulnerable near-term while above the yearly open. From a trading standpoint, rallies should be limited to 1.1850 IF price is heading lower on this stretch with a close below 1.1746 needed to fuel the next major leg of this decline.” The Euro rebounded in the following days with price registering an intraday high at 1.1835 before finally breaking support into the monthly open.
The decline extended more than 3.5% off the February high and despite six-consecutive attempts, EUR/USD has been unable to mark a daily close below a key support barrier near the yearly low. Today is the seventh attempt and the bears are once again trying to validate the break- watch the daily close. Note that weekly RSI is now at the lowest levels since February of last year and the broader momentum profile remains in favor of the bears for now.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: A closer look at Euro price action shows EUR/USD trading within the confines of a descending pitchfork extending off the January high. The key level in focus remains 1.1590-1.1612- a region dined by the December low, the 2026 low-close, and the 100% extension of the January decline. A daily close below this threshold would be needed to mark resumption of the multi-month downtrend towards the November low-day close (LDC), and the March 2020 & 2022 swing highs at 1.1492/97. Look for a larger reaction there IF reached. Subsequent support is seen at the May high-day close / June low close at 1.1386-1.1405 and the 38.2% retracement of the 2025 advance near 1.1355.
Initial resistance is now eyed back at 1.1612 and is backed by the 200-day moving average, currently near ~1.1673. Note that the 75% parallel converges on this threshold over the next few days. Broader bearish invalidation is now lowered to the 38.2% retracement of the January decline and the objective yearly open at 1.1727/46. The upper parallel converges on this zone into the close of the week and a break / daily close above would be needed to suggest a more significant low is in place and that a larger trend reversal is underway towards the monthly open at 1.1818.
Bottom line: Euro is attempting to confirm a break of multi-month support, and the focus is on today’s close with regards to this key zone. From a trading standpoint, rallies should be limited to the 200-day moving (~1.1673) IF price is heading lower on this stretch with a close below 1.1589 needed to keep the immediate decline viable. Look for a larger reaction on a drop towards 1.1492/97 IF reached.
Keep in mind we get the release of the January Core Personal Consumption Expenditures on Friday with the Fed & ECB interest rate decisions on tap next week. Traders will be closely eyeing the Federal Reserve’s updated Summary of Economic Projections amid growing uncertainty regarding the outlook for monetary policy. The recent surge in oil prices caused by the ongoing war in Iran has clouded the inflation outlook, and with last week’s dismal Non-Farm Payrolls report showing signs of weakness in the labor markets, the Fed’s dual mandate is once again at odds. As of now, markets are still pricing just a 48% probability for a rate cut in July with September now showing a 62% chance. Look for the updated interest rate dot-plot to shed some light on the potential timing of the next move from the Fed next week. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Euro Weekly Technical Forecast for a closer look at the longer-term EUR/USD trade levels.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on Twitter @MBForex
