Euro[1] has rallied nearly 4% off the yearly lows with the advance now approaching the July highs. While the broader risk remains weighted to the topside, we’re looking for a near-term pullback to offer favorable entries. Here are the updated targets and invalidation levels that matter on the EUR/USD charts this week.
EUR/USD Daily Price Chart
Technical Outlook: In my previous EUR/USD Technical Outlook[2] we noted that although price was vulnerable for a near-term pullback, “Seasonal tendencies (heading into September) favor Euro strength and the focus remains weighted to the topside in price while above 1.1510/29.” EUR/USD marked registered a low at 1.1526 last week before rebounding higher with the advance now trading just below targeted resistance at the 38.2% retracement / July high at 1.1780/91.
Interim daily support rests with the 100-day moving average at ~1.1665 with broader bullish invalidation down at the monthly open at 1.1595. A breach above this threshold targets the June highs / pitchfork[3] resistance at 1.1850/65- look for a bigger reaction there.
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EUR/USD 240min Price Chart
Notes: A closer look at Euro price action shows a clear break of the weekly opening-range[5]and leaves the risk weighted to the topside into the close of the week. A modified pitchfork extending off the August / September lows further highlighting the 1.1780/91 near-term resistance barrier- a breach / close here is, “still needed to fuel the next ‘leg’ higher in price[6].”
