EUR/USD Weekly Technical Forecast: Euro Choppiness to End Soon
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.
EUR/USD Daily Chart (Breakout coming…)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX