Euro Technical Forecast: EUR/USD Bulls Eye Key Breakout

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro rebound off downtrend support now testing range resistance- breakout pending
• EUR/USD threat for larger recovery while above yearly open- US 4Q GDP, Core PCE on tap
• Resistance 1.05, 1.0573/87 (key), 1.0677- Support 1.0352/54, 1.0271, 1.02 (key)

Euro is trading near the yearly high with a rebound off downtrend support threatening a larger recovery in the weeks ahead. The focus remains on a breakout of the January range for guidance with the bears still vulnerable while above the yearly open. Battle lines drawn into the close of the month 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 rangebound just above downtrend support and that , “The focus is on a breakout of the 1.02-1.05 range for guidance here with bears vulnerable while above slope support.” The Euro recovery extended 2.9% of the monthly low with the 1.05-handle holding resistance for now.

Initial weekly support rests with the 2016 low / 2025 yearly open at 1.0352/54 and is backed by the objective low-week close at 1.0271. Key support remains with the 61.8% retracement of the 2022 advance at 1.02 with a break below the lower parallel (blue) ultimately needed to fuel the next major leg off the decline towards parity.

Key weekly resistance remains at 1.0573/87- a region defined by the 100% extension of the January advance, the 38.2% retracement of the September decline, and the 2023 low-week close (LWC). Note that the median-line converges on this threshold over the next few weeks and break / weekly close above would be needed to suggest a more significant low was registered last month / a larger trend reversal is underway. Subsequent resistance eyed at the April LWC at 1.0678 and the 52-week moving average / February LWC at 1.0744/77- look for larger reaction there IF reached.

Bottom line: A rebound off downtrend support is now within striking distance of trend resistance with the focus remains on a breakout of this multi-week range. From a trading standpoint, losses should be limited to the yearly open IF price is heading higher on this stretch with a close above 1.0587 needed to suggest a larger turn is underway.

Keep in mind we are heading into the close of the month with U.S. 4Q GDP and Core Personal Consumption Expenditures (PCE) on tap next week. Stay nimble into the release and watch the weekly closes here for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex