EUR/USD Weekly Technical Forecast: Euro Set to Turn Back to the Upside?
- EUR/USD has support at its feet via trend-lines/slopes
- Up above is formidable resistance, but has room to get there
- Giving support and trend the benefit of the doubt near-term
Last week, EUR/USD pulled back from the 2008 trend-line in-line with expectations, continuing the theme of weak one week, strong the next, back to weak again. Will the next sequence play out to the upside in the week ahead, continuing the back-and-forth period of indecision?
Giving support at its feet and the overall trend the benefit of the doubt, yes, that looks like the most likely outcome. There lies a short-term trend-line from mid-January crossing under Thursday’s low. That could break, though, which wouldn’t be bearish just yet as there is a much more important line of support not far beneath dating back to May 2016.
As long as the long-term slope holds, then the euro can still maintain a fairly positive posturing. Slip below, and swing-lows carved out in the last few weeks near 12200 will quickly come under fire, along with the breakout level (high of 2017 at 12092).
The ‘obvious’ resistance on the top-side remains that pesky 2008 trend-line. We have seen three rejections from it over the past month. If the euro keeps on running into it without turning lower in a meaningful way, at some point it seems likely it will break. A weekly close above is needed for confirmation given the long-term nature of the trend-line.
All-in-all, heading into the new week the euro is still given the benefit of the doubt for another push higher, but should levels start breaking on the downside then the 2008 trend-line may have marked an important high, at least in the intermediate-term.
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EUR/USD Daily Chart
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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.