In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro broke above a multi-month consolidation range with the advance targeting key resistance just higher. Here are the key targets & invalidation levels that matter on the EUR/USD[1] weekly chart. Review this week’s Strategy Webinar[2] for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: In last month’s EUR/USD Weekly Technical Outlook[4] we noted that the broader short-bias remained ‘vulnerable while above this region (1.13) heading into the close of the year.’ Euro registered a low at 1.1306 early in the month with the subsequent rally failing just ahead of key resistance this week. Note that RSI has not broken above 50 since the early-2018 breakdown – a close above would mark a change of behavior in the weekly momentum profile.
The levels remain unchanged heading deeper into January trade with critical resistance steady at 1.1586-1.1603 – a region defined by the March trendline, the 61.8% retracement[5] and the September outside-weekly reversal close. ‘A breach / close above this threshold is needed to suggest that a more significant low is in place with such a scenario targeting subsequent topside objectives at 1.1727 and the median-line / 52-week moving average / September high at 1.1800/15.’
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading
