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] has rallied more than 2% against the US Dollar[2] since the monthly / yearly lows registered last week with the advance now targeting the first test of resistance. Here are the key targets & invalidation levels that matter on the EUR/USD[3] weekly chart. Review this week’s Strategy Webinar[4] for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: In my previous EUR/USD Weekly Technical Perspective[6] we stated that we were looking for exhaustion into the 1.13-handle where the November 2016 swing high converges on the 200-week moving average. Price registered an intra-week low at 1.1215 on building divergence before recovering sharply into the close of the week. Note that a weekly close below 1.13 was never resisted and as such, keeps our focus in price higher while above this threshold.
Initial resistance is eyed at the sliding parallel (red) extending off the January 2017 highs around ~1.1470s backed by the September outside weekly-reversal close at 1.1603. Ultimately a breach above channel resistance / 38.2% retracement[7] at 1.1228 would be needed to mark resumption of the broader up-trend.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy[8]
Bottom line: Euro has
