EUR/USD Highlights:
- 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
To view the longer-term technical and fundamental outlook for the Euro, or to see our top trade ideas for 2018, check out the DailyFX Trading Guides.
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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