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

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.