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EUR/USD Weekly Technical Forecast: Bullish Momentum Persists, Eyes on Key Brexit Vote

EUR/USD Weekly Technical Forecast: Bullish Momentum Persists, Eyes on Key Brexit Vote

Justin McQueen, Strategist

EUR/USD TECHNICAL HIGHLIGHTS:

EUR/USD Positive Momentum Builds

The positive momentum in the Euro continues to build with the currency seeing its third consecutive and largest weekly gain since June. With the currency breaking out of its 3-month downtrend channel, this further suggests to us that 1.0879 is the interim low. Alongside this, given the recent close above the September 13th high at 1.1110, this raises scope for a move towards the 200DMA at 1.1210 with the 50% Fibonacci retracement of the 1.1570-1.0879 drop just ahead at 1.1224. That said, with the relative strength index edging towards overbought territory, which in turn may see further upside begin to slow.

Eyes on Historic Brexit Vote

Much of the initial focus however, for major USD pairs will be on the historic Brexit vote over the weekend and given the binary nature of the vote, this will dictate the short-term direction for the pair. As such, if Boris Johnson were to fail in getting his deal through parliament, this could see EUR/USD fall below the 1.1100 handle eyeing a test of the 50DMA at 1.1036.

TECHNICAL LEVELS

Support

Resistance

1.1042

23.6% Fib

1.1143

38.2% Fib

1.1036

50DMA

1.1210

200DMA

1.0990

October 15th Low

1.1224

50% Fib

EUR/USD PRICE CHART: DAILY TIME FRAME (Dec 2018 – Oct 2019)

Daily EURUSD Price Chart

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES