In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro[1] is trading into a critical support confluence early in the month with major event risk on tap this week. Here are the key targets & invalidation levels that matter on the EUR/USD[2] weekly chart. Review this week’s Strategy Webinar[3] for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: In last week’s EUR/USD Price Outlook[5], we highlighted the 1.1780/91 resistance barrier while noting that, “a breach / close here is still needed to fuel the next ‘leg’ higher in price.” Euro probed into this region for days (never closed above) with a final attempt post-FOMC giving way to a 2.6% sell-off in the single currency.
The decline is now testing multi-year slope[6] support extending off the November 2015 lows (red) with the 61.8% retracement[7] just lower highlighting a key zone at 1.1498-1.1510- we’re looking for a reaction off this mark with the immediate short-bias at risk while above. Ultimately a breach above the 1.17-handle would be needed to shift the broader focus back to the long-side.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy[8]
Bottom line:Looking for signs of downside exhaustion while above 1.1498 for
