Euro Technical Outlook: EUR/USD Short-Term Trading Levels
- Euro June rally hits uptrend resistance, risk of correction in the short term
- EUR/USD Watch for breakout of months-long consolidation – CPI, PPI due to be released
- Resistance ~1.0860s, 1.0879/88 (key), 1.0933/39 – Support 1.0792/94, 1.0755, 1.0724/34 (key)
The Euro ended a seven-day rally yesterday with EUR/USD trading just below multi-month resistance. Prices continue to narrow towards the top of a larger consolidation pattern, with attention focused on a possible breakout in the coming weeks. These are the latest target and invalidation levels of interest on the Euro’s short-term technical chart.
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Euro Price Chart – EUR/USD Daily
Chart created by Senior Technical Strategist Michael Boutros. EUR/USD on TradingView
Technical Outlook: Last month EUR/USD Short-Term Technical Outlook “For now, the monthly open range is defined by June 3rd.rd “Candlestick. Look for a breakout of this range and keep an eye on the weekly close for guidance.”The next day, the range tumbled, dropping more than 2.2% from the monthly high and its first decline in three weeks.EUR/USD rebounded from a 78.6% retracement of April’s rally to 1.0668 towards the end of the month, with bulls recording a gain of more than 1.6% from the June low.
The euro has been trading within a larger consolidation pattern since the December highs, with the recent gains looking somewhat fragile just before gradient resistance and at risk of a pullback.
Euro Price Chart – EUR/USD 240min
Chart created by Senior Technical Strategist Michael Boutros. EUR/USD on TradingView
Note: Taking a closer look at the Euro price action, EUR/USD is trading within a pitchfork formation rising from the June lows with the recent gains having been exhausted to last weekend’s 75% parallel. The immediate focus is on a breakout of the weekly opening range (1.0803-1.0845) for guidance and the near term outlook remains constructive within this formation.
First support is at the 200-day moving average/April open 1.0792/94 And supported by the lower parallel line/50% return 1.0755– If the price is trending up in this section, losses should be limited to this threshold. strong Disabled target raised to June Open/61.8% Fibonacci return 1.0725/35– A breakdown below this level would threaten a test of the range support (below 1.07).
The upper resistance is the confluence of the highlighted slopes (~1.0860Closely supported by the June high close (HDC)/1.618% extension of the late June rally. 1.0879/88– Look for a bigger reaction if we reach the break/close needed to validate the breakout of the yearly consolidation pattern towards the 61.8% retracement/3 month (HDC). 1.0933/39– Areas of interest that could indicate cap exhaustion/price inflection if reached.
Conclusion: The EUR recovery is currently approaching the upper limit of a larger multi-month consolidation pattern. Here, near-term upside may be fragile, but within this formation, the near-term outlook remains constructive. From a trading perspective, aim to reduce long exposure on the rise to the upper parallel and raise protective stops. Losses should be limited to 1.0755 if price rises in this zone and a close above 1.0888 is needed to validate a larger price breakout.
Later this week, key US inflation data will be released with the Consumer Price Index (CPI) and Producer Price Index (PPI) due to be released on Thursday and Friday respectively. Let’s take a look at the weekly close here and keep an eye on the breakout of the monthly opening range for further guidance. Check out my latest article. Euro Weekly Technical Forecast Let’s take a closer look at the longer term EUR/USD trading levels.
Major EUR/USD Economic Data Releases
Economic Calendar – the latest economic trends and risks of future events;
Active short-term technical charts
— Written by Michael BoutrosSenior Technical Strategist, FOREX.com
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