Euro Short-term Outlook: EUR/USD Coils Below Resistance Ahead of ECB, NFP

Euro Technical Outlook: EUR/USD Short-term Trade Levels

• Euro surges more than 3.5% off May low- rally stalls at initial resistance hurdle
• EUR/USD weekly opening-range intact ahead ECB / NFP- breakout to offer guidance
• Resistance 1.1455, 1.1514, 1.1564/73 (key)- Support 1.1347, 1.1275, 1.1214 (key)

The Euro rally exhausted into resistance early in the month with the weekly range intact ahead of major event risk. Battle lines drawn on the Euro short-term technical charts heading into the ECB interest rate decision and U.S. Non-Farm Payrolls.

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 EUR/USD had rebounded off technical support and shifts the, “focus on a breakout of this week’s range. Risk remains for a larger correction while within this near-term formation. From a trading standpoint, rallies would need to be limited to 1.1276 IF price is heading lower on this stretch..” Euro broke above the April downtrend four-days later with price surging more than 3.5% off the May low. The advance failed at technical resistance into the start of the month at the 1.618% extension of the May advance near 1.1455. The focus is on a reaction off this mark with a breakout of the weekly opening-range to offer some guidance in the days ahead.

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 exhausting into resistance yesterday with the weekly-range now set just above the objective weekly / monthly open at 1.1347. Subsequent support seen at the 2023 swing high at 1.1276 with near-term bullish invalidation at the 2024 swing high / 61.8% retracement at 1.1214- a break / close below this threshold would be needed to suggest a more significant high is in place / a larger reversal is underway towards key support at 1.1040/74.

A topside breach of the weekly opening range exposes subsequent resistance objectives at the 2025 high-day close (HDC) at 1.1514 and 1.1564/73- a region defined by the 100% extension of the May advance and the yearly swing high. Look for a larger reaction there IF reached with a daily close above needed to mark uptrend resumption / fuel the next major leg of the Euro advance towards 1.17.

Bottom line: A breakout of the April downtrend is now testing the first major resistance hurdle with the weekly / monthly opening-ranges taking shape just below- look for the breakout. From a trading standpoint, losses would need to be limited to 1.1214 IF price is heading higher on this stretch with a close above the yearly high needed to mark resumption of the broader uptrend.

Keep in mind we get the release of the ECB interest rate decision tomorrow with NFPs on tap Friday. Stay nimble into the releases 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.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex