Euro Technical Forecast: EUR/USD Post-Election Sell-off Tests Support

Euro Technical Forecast: EUR/USD Weekly Trade Levels

Euro marks outside-weekly reversal off resistance- off more than 2.3% in November
EUR/USD post-election sell-off testing major support pivot- US inflation, retail sales on tap
Resistance 1.0740/77 (key), ~1.0870, 1.0939– Support 1.0587-1.0641 (key), 1.0508, 1.0448

Euro has plummeted more than 2.8% off the monthly high with the post-election rally in the US Dollar plunging EUR/USD into support near the yearly lows- risk for price inflection into this key pivot zone. 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 last month’s Euro Technical Forecast we noted that EUR/USD was, “testing confluent support into the close of the month and while the medium-term threat remains lower, the immediate decline may be vulnerable here… rallies should be limited to 1.0939 IF Euro is heading lower on this stretch with a close below 1.0740 needed to mark downtrend resumption.”

Euro rallied more than 1.6% in the following weeks to briefly register an intraday high at 1.0937 before reversing sharply lower. The break of key support last week is has already extended into the next major lateral zone at 1.0587-1.0641- a region defined by the 2023 low-week close (LWC), the 2024 low, and the yearly low-close. We’re looking for possible exhaustion / price inflection into this zone over the next few days.

A break / weekly close below would expose the 2023 low-close at 1.0508- note that the 25% parallel converges on this zone into the close of the month- look for a larger reaction there IF reached. Subsequent support objective seen at the 2023 low at 1.0448 and the 2016 low at 1.0352.

Key resistance is now back at the 61.8% retracement / February low-week close (LWC) at 1.0740/77- a breach / close above this threshold would be needed to suggest a more significant low was registered / alleviate further downside pressure. Subsequent resistance eyed at the 52-week moving average (currently ~1.0870) backed again by the March HWC at 1.0939 (broader bullish invalidation).

Bottom line: The post-election plunge is now testing a major support zone 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.

Keep in mind we get the release of key US inflation data (CPI) on Wednesday with the retail sales on tap Friday. Stay nimble into the releases and watch the weekly close here for guidance. 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.