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Euro Outlook: EUR/GBP, EUR/JPY & EUR/CHF Tech Set-Ups

Euro Outlook: EUR/GBP, EUR/JPY & EUR/CHF Tech Set-Ups

Richard Snow, Markets Writer

Euro Analysis:

  • EUR/GBP: Selling has continued as crucial support level nears
  • EUR/JPY: Can bullish momentum break above LT resistance?
  • EUR/CHF: Weekly pennant-like formation suggests bullish continuation
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EUR/GBP Technical Analysis and Key Levels

The Euro has given back much of its gains made against the Pound Sterling for most of 2020 as the economic zone continues to face challenges in dispensing a Covid-19 vaccine. This is in stark contrast to the United Kingdom, which, as of 28 March 2021, had provided at least one dose to 58% of its adult population. For greater insight see our EUR/GBP analyst pick by Thomas Westwater.

The weekly EUR/GBP chart highlights the decline since the start of the year. The MACD shows little sign of letting up although the pair is fast approaching the 0.8470 zone of support.

EUR/GBP Weekly Chart

EURGBP weekly chart

Chart prepared by Richard Snow, IG

The daily chart tells a similar story as price action trades below the most recent level of support (dotted line), approaching the previously mentioned zone of support at 0.8470. A break below this level would leave very little between itself and the 2019/2020 low of 0.8275.

However, should the support zone hold, price action may consolidate between the 76.4% Fibonacci level (drawn from the 2020 high to the 2020 low) and the support zone before any directional move becomes apparent.

EUR/GBP Daily Chart

EURGBP daily chart

Chart prepared by Richard Snow, IG

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EUR/JPY Technical Analysis and Key Levels

The EUR/JPY chart highlights a narrowing of price action since the drastic swings that prevailed around the global financial crisis (GFC) and thereafter. Price action has more recently attempted to breakout of the long-term descending trendline which has become a rather key level (highlighted in blue).

EUR/JPY Monthly Chart

EUR/JPY monthly chart

Chart prepared by Richard Snow, IG

For the bullish momentum to continue, there would need to be a break above the long-term descending trendline and ideally a move above the 50% Fib at 131.71. However prices have traded lower since rebounding off the LT trendline – indicative of a potential pullback towards the 127.15 zone of support and the shorter-term ascending trendline (labelled on the chart). Bullish continuation plays may then present themselves if the zone of support around 127.15 serves as a launch pad for a renewed advance in price.

A break down of the 127.15 zone opens the door to a deeper retracement towards the dotted descending trendline and possibly even the 38.2% Fib level.

EUR/JPY Weekly Chart

EURJPY weekly chart

Chart prepared by Richard Snow, IG

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EUR/CHF Technical Analysis and Key Levels

The Euro has proceeded to make higher highs and higher lows since the 2020 low as bullish momentum looks to continue. The weekly EUR/CHF chart presents a pennant-like formation after a rather strong advance in price which now hovers around the 38.2% Fib (drawn from the 2018 high to the 2020 low), which suggests that the bullish run may not be over.

Find out what the bullish pennant is and how it can help identify bullish continuation

EUR/CHF Weekly Chart

EURCHF weekly chart

Chart prepared by Richard Snow, IG

The daily EUR/CHF chart highlights key levels to help support/invalidate a bullish continuation. A break above the recent high at 1.1120 or above the highest point of the pennant may suggest bullish continuation, resulting in the next significant level of resistance coming in at 1.1190.

A break below the recent low of 1.1006 or even a below the lowest level of the pennant would suggest that the current move may be over-extended and price could be due for a retracement. This would place the 1.0920 level as the next relevant level of support.

EUR/CHF Daily Chart

EURCHF daily chart

Chart prepared by Richard Snow, IG

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--- Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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