Euro Technical Forecast: EUR/USD Plunges into Key Pivot Zone

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro reversal off resistance extends more than 1.1% for a third weekly-decline
• EUR/USD bears now testing key pivot zone- threat for exhaustion / price inflection
• Resistance 1.1365, 1.1497-1.1510 (key), 1.1748- Support 1.1192-1.1228 (key), 1.1108, 1.1038

Euro is poised to mark a third consecutive weekly-decline with the EUR/USD losses extending on the heels of the FOMC interest rate decision. The sell-off takes price into the first major test for the bears at a major pivot zone- risk for possible inflection off this mark in the days ahead. Battle lines drawn on the Euro weekly technical chart.

Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In my last Euro Technical Forecast we noted that EUR/USD was, “testing technical resistance near the 1.15-handle and the focus is on possible price inflection off this mark. From a trading standpoint, losses should be limited to 1.1038 IF Euro is heading higher on this stretch with a close above 1.1510 needed to mark uptrend resumption.” EUR/USD has plunged more than 3.1% off those highs with the post-FOMC sell-off now approaching the first major level of support.

The immediate focus is on this week’s close with respect to 1.1192-1.1228- a region defined by the objective 2024 & 2023 high closes. A break / close below this threshold would threaten a larger correction towards the 2023 high-week close (HWC) at 1.1108 and the December HWC / 2024 yearly open at 1.1038- both levels of interest for possible downside exhaustion / price inflection IF reached. Note that losses below this level would suggest a more significant high is in place / a larger trend reversal is underway.

Initial weekly resistance is eyed with the high-week reversal close at 1.1365 with a breach / close above 1.1497-1.1510 still needed to mark uptrend resumption. Subsequent resistance objective eyed at 1.1748 and 1.1917.

Bottom line: A reversal off technical resistance is now testing initial support at a key pivot zone. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 1.1365 IF price is heading lower on this stretch with a close below 1.1192 needed to fuel the next leg of this decline. Ultimately, we’re looking for a stronger reaction on test of uptrend support IF reached.

Keep in mind we get the release key inflation & retail sales data out of the U.S. next week. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

Key Euro / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex