Euro broke below October opening-range yesterday and keeps the focus on a late-month low in the single currency. Today’s post-ECB decline is now approaching key support targets and puts the broader short-bias at risk into these levels. Here are the updated targets and invalidation levels that matter on the EUR/USD charts.
EUR/USD DAILY PRICE CHART
Technical Outlook: In last week’s EUR/USD Price Outlook, our ‘bottom line’ cited that Euro was, “approaching near-term resistance targets which could see prices pullback a bit. From a trading standpoint, look for possible price exhaustion on a rally into 1.1617/27 – the trade remains constructive while above 1.15…” Price registered a high at 1.1622 the following day with the subsequent reversal breaking below the October opening-range lows yesterday.
The move shifts the focus towards key confluence support at 1.1345 where the 2018 low-day close converges on both multi-year upslope & near-term downslope supports. We’re looking for a reaction off this mark with a break / close below risking a larger decline towards the yearly low at 1.13 and the lower parallel / 61.8% retracement of the 2017 advance at 1.1187.
EUR/USD 120MIN PRICE CHART
Notes: A closer look at price action sees EUR/USD trading within the confines of a near-term descending pitchfork formation extending off the mid-month highs with the pair reversing sharply off the median-line today in New York trade. The focus remains on support targets lower at 1.1362/66 and 1.1345 – we’re looking for possible price exhaustion on a move into these levels. Interim resistance stands at 1.1432 with a breach above parallel resistance needed to alleviate further downside pressure.
Bottom line: The break of the monthly opening-range keeps the risk weighted to the downside in Euro for now with price approaching key support zones just lower. From a trading standpoint, look for a reaction off structural support with the immediate short-bias at risk heading into the lower parallels. Keep in mind we get US 3Q GDP figures tomorrow with the release likely to fuel added volatility in the USD crosses. A weekly close below 1.1345 would be needed to keep the bears firmly in control.
