Euro Forecast: EUR/USD 1st Green Week in 7, but Can Support Hold?
Euro, EUR/USD Talking Points:
- EUR/USD posted its first green weekly bar since late-November, making the first green weekly candle in seven weeks.
- The pair ran into a major support level on Monday at the 1.0200 handle, which led to a dragonfly doji. And while sellers did continue to push, the rest of the week saw higher-lows each day through Friday.
- EUR/GBP put in a major reaction at a big level and EUR/JPY tested a breakdown: Both pairs are looked at below.
- I look at all three Euro pairs in the weekly webinar on Tuesday, and you’re welcome to join: Click here for registration information.
EUR/USD Finally Finds a Bounce
It’s been tough sledding for Euro bulls since the Q4 open last year and that’s particularly been the case over the past six weeks as there hasn’t been a green weekly bar since the late-November candle. That push lasted through early-December, until the 1.0611 Fibonacci level came into play to mark the high on the day of NFP that month. That then led to a decisive continuation in the sell-off, all the way through this week’s open when a major level came into play on Monday for EUR/USD.
The 1.0200 level is a key Fibonacci level, as this is the 23.6% retracement from the 2021-2022 major move. And from that same major move, the 61.8% retracement caught the high in 2023, and the 38.2% marker set the low for the first-half of last year. That same price then came back to mark resistance in December before sellers went on the attack and that push finally amounted to a test of the 23.6% marker earlier in the week.
EUR/USD Weekly Price Chart
EUR/USD Shorter-Term
That support bounce certainly did not eliminate selling pressure as bears continued to defend the prior support swing of 1.0344. But – notably, each day of last week showed a higher-low after the Monday test of the 1.0200 level. This illustrates waning bearish pressure that could potentially allow for a turn. But – a lack of selling pressure at or near lows isn’t enough to allow for reversal scenarios, as we would also need to see bears relent, and that hasn’t yet happened.
From the daily chart, we can identify some key levels that could denote a turning of the tide. The 1.0300 psychological level remains key and above that, it’s the 1.0344 level. If bulls can force a breakout from that price, the next big test would be at the 1.0406 Fibonacci level, which last came into play on January 6th and 7th as it held bulls back before the sell-off that ultimately tested the 1.0200 handle last week.
EUR/USD Daily Chart
EUR/JPY
While EUR/USD sellers had stalled last week, the same can’t be said in EUR/JPY, where the pair put in a fresh monthly low while testing below the 160.00 level on the chart.
Given the expectation for the ECB to continue cutting rates, this overlays well in EUR/JPY as we move into a week with a Bank of Japan rate decision. I had looked at the push of strength in Yen-pairs last week and as I noted then, EUR/JPY and GBP/JPY could both present more attractive scenarios of Yen-strength than the major pair of USD/JPY. I think that remains the case into next week and, so far in 2025, it’s been a consistent run of lower-lows and highs in EUR/JPY.
For resistance, there’s a Fibonacci level at 161.44 and then a prior price action swing at 162.04, both of which could function as lower-highs from the prior week swing high.
Below the 160.00 level, there’s a Fibonacci level at 158.66 after which the trendline connecting August and September swing lows comes into play.
EUR/JPY Daily Price Chart
EUR/GBP
In the prior week forecast for the British Pound, I took a look at EUR/GBP as the normally sleepy pair had started to show breakout tendencies. The .8401 level had been tested but bulls hadn’t yet been able to show a break above that and, instead, I drew attention towards the .8448 level that had previously marked the highs back in October.
That price came into play on Tuesday and then again on Wednesday. The pullback from that saw buyers push another bounce, with the price coming back into play on Friday, as well.
At this point bulls remain in-control as the recent higher-high goes along with a higher-low. But the next zone of resistance overhead could be a difficult spot for buyers to drive continuation, and that plots around the .8500 psychological level, which is confluent with a Fibonacci level that plots at .8512.
EUR/GBP Daily Chart
--- written by James Stanley, Senior Strategist
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2025