EUR/USD Weekly Technical Outlook: Euro Fending Off USD Buyers (For Now)
- EUR/USD faring better than other USD-pairs, so far
- 2008 trend-line remains a big obstacle to overcome
- Technical levels, lines highlighted on daily and 4-hr time-frames
Last week, we saw some aggressive moves in USD-pairs, but sellers didn’t show up in earnest in EUR/USD like they did in the major currencies. But that could change in the week ahead. The 2008 trend-line remains a big obstacle to overcome.
The reversal-high on Jan 25 didn’t resolve itself into a dive lower, instead we’ve seen EUR/USD trade sideways to upward. Friday resulted in a modest give-back from very near the 1/25 high and 2008 trend-line, but it has yet to be much of a forceful rejection.
Monthly Chart – EUR/USD
Given the long-term nature of the trend-line, you need to use a crayon to draw it rather than fine ball-point pen. There is still some room for EUR/USD to wiggle higher, but not much if it is act as resistance.
Daily Chart – EUR/USD
Retest of the key-reversal high (double-top), then turn lower? The 2008 trend-line is placed where it is for now given the first reaction on 1/25, but as the monthly chart shows, there is wiggle room should we see a new high.
Dialing in on the 4-hr time-frame, there is a trend-line extending higher from Jan 10 crossing under several small lows created last week. Taking the parallel of that line, we have a solid week-long upward channel in place. In the event of an undercut of the channel, a double-top may be in the works.
Looking lower, support comes in at the top of the triangle created late last month which proceeded the last leg higher; ~12320/290 is the zone to watch. Should the euro hold trend support, another thrust could be in the works, but risk of a swift failure is elevated with the long-term trend-line looming overhead.
See how traders are positioned in EUR/USD and what it may mean on the IG Client Sentiment page.
4-hr Chart – EUR/USD
Looking to the channel and trend-line for guidance in the days ahead.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.