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EUR/USD Technical Highlights:

  • Choppy price action to give-way to trend soon
  • Trend and tone suggest a breakdown, but…
  • A breakout is needed first before making directional bets

Check out the recently released Euro Q1 Forecast to see our analysts’ intermediate-term fundamental and technical outlook.

Choppy price action to give-way to trend soon

The trading range over the past two months is about as congested as it can get without soon giving way to a price swing in one direction or the other. It’s been good for the range/mean-reversion trader, but trading conditions look set to shift in favor of those seeking momentum.

Given the overall bearish trend and tone of the Euro, a downside break is seen as most likely. There is a short-term trend-line off the November low which acts as the first threshold to be broken, followed by a pair of lows situated right around 11267. A break below 11267 is viewed as reason to look for the November low to not only be challenged but broken.

The underside trend-line from November 2017 lies not too far beneath last year’s November low; this could act as support but with it running in the direction of the trend and the two-month long congestion having built up a good amount of pressure, a break of all near-term support levels certainly looks possible at this time.

Downward pressure is likely to remain on the Euro even if it doesn’t soon break down. To negate this bias a strong breakout well into the mid-11500s will be needed before there may be room to run. But at the immediate moment, if no momentum comes in from either side of the tape then traders will likely be best served either fading bottom and top-side levels or keeping their power dry for an eventual breakout.

Traders are generally flat EUR/USD, see the IG Client Sentiment page to see how changes in positioning could signal the next price move.

EUR/USD Daily Chart (Breakout coming…)

EURUSD Daily Chart

Helpful Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX

Other Weekly Technical Forecasts:

Australian Dollar Forecast: AUD/USD, AUD/CAD & EUR/AUD Prices Eye Technical Reversal Patterns

British Pound Forecast:20-Month Spike Low May Be Re-Tested

US Dollar Forecast: Dollar Preparing to Break from its Most Restrictive Range In Four Years

Equity Forecast: Technical Forecast for Dow, S&P, DAX, FTSE 100 and Nikkei

New Zealand Dollar Forecast: NZDUSD to Continue Slide, NZDCAD Faces 2016 Resistance

Gold Forecast: Bulls Stopped Short Ahead of Key Level

Crude Oil Forecast:After Bull Flush Out, Bounce Likely In Play