Euro Technical Outlook: EUR/USD Short-term Trade Levels
- EUR/USD has declined more than 1.5% from the monthly highs, returning to a confluence support zone anchored by the yearly open and key Fibonacci retracements.
- Price remains contained within a descending pitchfork structure, keeping downside pressure intact while this support is tested.
- A daily close below this pivot would signal trend resumption toward deeper support, while stabilization above it leaves room for a corrective rebound.
- Key event risk ahead with Eurozone PMI & US PCE, GDP & PMI on tap tomorrow.
- Resistance ~1.1820s, 1.1850/69 (key), 1.1919- Support 1.1746/71 (key), 1.1686, 1.1646
EUR/USD has retreated from recent highs and is now testing a pivotal structural level that has repeatedly acted as a directional hinge this year. Euro has continued to trade within a multi-week downtrend, and the focus is on how the market behaves at this threshold. With the weekly close approaching, traders will be watching for confirmation of either renewed downside momentum or evidence that the decline is stabilizing. The resolution at this support zone is likely to define the next phase for the Euro in the sessions ahead. 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 my last Euro Short-term Technical Outlook we noted that EUR/USD was trading just above confluent support and to look, “for a reaction off this zone early in the month. From a trading standpoint, rallies would need to be limited to 1.1919 IF price is heading lower on this stretch with a daily close below 1.1746 needed to fuel the next leg of the decline.” Euro rallied nearly 1.4% off support in the following days with price registering an intraday high at 1.1928 (close high at 1.1914) before reversing.
The subsequent decline has extended more than 1.5% off the highs and takes EUR/USD back into key support today at 1.1746/70- a region defined by the objective yearly open, the February opening-range low, and the 61.8% retracement of the January range. Once again we are looking for inflection at this pivotal zone into the close of the week for guidance.
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. A break / daily close below 1.1746 is needed to mark downtrend resumption with subsequent support objectives seen at the 78.6% retracement at 1.1686 and the 200-day moving average / January low-day close (LDC) at 1.1644/46. The next major technical consideration rests with the December low and the 100% extension of the January decline at 1.1590-1.1612 – look for a larger reaction there IF reached.
Initial resistance is eyed with the upper parallel, currently near ~1.1820s. Bearish invalidation is now lowered to 1.1850/69- a region defined by the February open, the 2025 high-close, and the objective weekly open. A breach / close above this level would be needed to suggest a more significant low is in place and a larger reversal is underway. Subsequent resistance remains with the 2025 swing high at 1.1918 backed by the 38.2% retracement of the broader 2008 decline and the high-day close at 1.2020/42.
Bottom line: Euro is testing pivotal support today and the focus is on a reaction off this mark 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.
Keep in mind there is key event risk into the close of the week with Eurozone PMI and US PCE, GDP & PMI data on tap tomorrow. GDP is expected to show the US economy grew at an annualized pace of just 3% after a previous print of 4.4%. It is important to note that this data covers the longest US government shut down in history (43days). As such, a stronger than expected print would underscore underlying strength / resilience in the US market and could further fuel the Dollar advance. 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
