Euro Technical Forecast: EUR/USD Bears Push Towards Parity

Euro Technical Forecast: EUR/USD Weekly Trade Levels

Euro poised to mark third-consecutive weekly decline- breaks to fresh yearly lows
EUR/USD testing technical downtrend support- risk for exhaustion / price inflection
Resistance 1.0508, 1.0670 (key), 1.0777– Support 1.0352, 1.02, 1.00

Euro has plunged for seven of the last eight weeks with EUR/USD breaking to fresh yearly lows on Friday. The decline is responding to confluent downtrend support today and while the broader outlook remains weighted to the downside, the immediate decline may be vulnerable into the close of the month. 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 support, “at the yearly range lows – risk for price inflection. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to the median-line / 1.0777 IF price is heading lower on this stretch with a close below 1.0587 needed to fuel the next leg of the decline.”

Euro broke lower later that week with the sell-off extending nearly 7.9% off the September / yearly highs. The decline halted at confluent downtrend support on Friday near the 2016 swing low at 1.0352. Note that the lower parallel of the descending pitchfork we’ve been tracking converges on this level and we’re looking for a larger reaction off this mark.

Initial weekly resistance now eyed back at the 2023 low-close at 1.0508 and is backed by the 38.2% retracement of the yearly range at 1.0670- we will reserve this threshold as our medium-term bearish invalidation level. Subsequent resistance seen at the February low-week close (LWC) at 1.0777 with a breach above the 61.8% retracement at 1.0835 ultimately needed to shift the broader focus back to the long-side for the Euro.

A break / close below the lower parallel (blue) would threaten another accelerated decline with subsequent support objectives seen at the 61.8% Fibonacci retracement of the 2022 advance at the 1.02-handle and parity (1.00)- look for a larger reaction there IF reached with the risk for downside exhaustion into the 2022 parallel.

Bottom line: A three-week plunge takes EUR/USD into downtrend support and a major pivot zone- risk for downside exhaustion / price inflection here. From a trading standpoint, a good zone to reduce portions of Euro short-exposure / lower protective stops- rallies should be limited to 1.0670 IF price is heading for a break lower with a closer below 1.0352 needed to fuel the next leg of the decline.

Keep in mind we have key inflation on tap into the close of a shortened holiday-week. Stay nimble into the monthly cross and watch the weekly closes here. I’ll publish an updated Euro Short-term Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

Key Euro / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

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.