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Euro Technical Forecast: EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF

Euro Technical Forecast: EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF

James Stanley, Senior Strategist

Euro, EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF Price Analysis

  • It was a big week for the risk trade as global equity markets continued their ascent.
  • Optimistic developments in Europe continue to stoke hopes for a faster recovery than initially expected.
  • EUR/JPY jumped up to a fresh yearly-high as EUR/USD stares down a strong zone of prior resistance. EUR/CHF and EUR/GBP could present some items of interest for Euro bulls.

Risk Rally Continues as Euro Drives Higher with Optimism

It was a big week for the risk trade in a number of ways. After the blowout NFP report on Friday the Nasdaq 100 jumped up to a fresh all-time-high; and this is taking place as a global pandemic remains and a bout of social unrest has begun to show in the US. Reverberations still continue to show in Europe as the ECB came to the table with an even larger stimulus package than expected this week, highlighting even more optimism for the European economy following the fiscal breakthroughs in the weeks prior.

And on a price basis – the Euro continued to show strength against many major currencies as EUR/JPY has just spiked up to a fresh yearly high, testing above the 124.00 level after having bottomed-out below 115.00 in the early-portion of last month.

EUR/JPY Technical Forecast: Bullish

EUR/JPY Four Hour Price Chart

EURJPY Chart

Chart prepared by James Stanley; EUR/JPY on Tradingview

EUR/USD Shies Away from 1.1400, Nears Huge Resistance

EUR/USD has shown similar strength of recent but given the additional Yen-weakness that’s entered the equation (as can be witnessed in the USD/JPY pair), that bullish run in the major pair isn’t quite as strong. And notably, on Friday when stocks were bursting higher in the US session and as EUR/JPY continued to jump, EUR/USD held resistance just inside of the 1.1400 handle.

EUR/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 14% 7% 10%
Weekly 16% -22% -7%
Current Retail Sentiment in EUR/USD
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This pair or setup may look a touch less bullish than the EUR/JPY setup above. While EUR/JPY has already jumped to a fresh yearly high, EUR/USD is staring down a huge zone of potential resistance that runs from 1.1448-1.1500. This is the same area that caught the March spike in the pair and that inflection point currently represents the yearly-high.

EUR/USD Technical Forecast: Neutral

EUR/USD Daily Price Chart

EURUSD Daily Price Chart

Chart prepared by James Stanley; EUR/USD on Tradingview

EUR/CHF Continues Streak on Way to Fresh Highs

While EUR/CHF may not be as popular of a pair, I wanted to include it in this forecast for a couple of reasons: The trend of recent has been very consistent, and while there’s no assurance that’ll continue in the same manner, it does highlight the potential of the pair to be a focal point for the European recovery theme. And, additionally, given the focus around the Swiss National Bank it might be difficult for the SNB to actively engage in currency-weakness policies and this may put more of the onus on the pair’s performance on the side of the Euro.

In EUR/CHF, conditions have quickly moved into deep overbought territory. But, so far, buyers have just continued to push. On the below chart, a few different spots of possible support have been identified in red, along with a couple of items of possible resistance outlined in green.

EUR/CHF Technical Forecast: Bullish

EUR/CHF Daily Price Chart

EURCHF Daily Price Chart

Chart prepared by James Stanley; EUR/CHF on Tradingview

EUR/GBP Tests Chart Support

The cross pair of EUR/GBP is in an interesting spot and, for this week, the British Pound was actually stronger than the Euro, leading to a net negative move, with price action testing the 50% marker of a key Fibonacci retracement. There’s also a nearby trendline just underneath price action that can be found by connecting February and May swing lows; and this can present an interesting option for Euro bulls given proximity to support.

EUR/GBP Technical Forecast: Bullish

EUR/GBP MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 26% 2% 15%
Weekly -11% -6% -9%
Current retail sentiment in EUR/GBP
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EUR/GBP Daily Price Chart

EURGBP Price Chart

Chart prepared by James Stanley; EUR/GBP on Tradingview

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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

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