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Euro Technical Outlook - EUR/USD, EUR/JPY and EUR/CHF Are All Going Their Own Way

Euro Technical Outlook - EUR/USD, EUR/JPY and EUR/CHF Are All Going Their Own Way

Daniel McCarthy, Strategist

Euro, EUR/USD, US Dollar, EUR/JPY, Japanese Yen, EUR/CHF, Swiss Franc - Talking points

  • EUR/USD has pause on its bearish run, but momentum is lurking
  • After a pullback, EUR/JPY might be resuming the ascending trend
  • EUR/CHF could provide opportunities on a breakout of a narrowing range

EUR/USD TECHNICAL OUTLOOK

After piercing below recent lows and a descending trend line support last week, EUR/USD raced to a 5-year low of 1.0471. That level and the January 2017 low of 1.0340 might provide support.

That run lower went under the March 2020 low of 1.0638 and that level may offer resistance. Further up, resistance could be at 1.0758 or the recent peaks of 1.0924 and 1.0936.

The price has consolidated sideways over the last few sessions ahead of the Fed meeting later today and a decisive break either way could see near term momentum gather in that direction.

It should be noted though that all period simple moving averages (SMA) are above the price and have negative gradients. This may suggest that bearish momentum has the potential to further evolve.

A move back above the short term 10-day SMA could be the first clue that bearish momentum is fading.

EURUSD CHART

Chart Created in TradingView

EUR/JPY TECHNICAL ANALYSIS

EUR/JPY has been going the opposite direction to EUR/USD due to broad based Yen weakness.

After making a 7-year high a fortnight ago, it pulled back to make a low at 134.78, above the prior low of 134.30. These levels may provide support.

The day of that most recent low, a bullish Spinning Top Candlestick was observed and could signal the resumption of the ascending trend.

Resistance might be at the pivot points and previous highs at 137.50, 138.00, 139.02, 140.00 and 141.06.

EURJPY CHART

Chart Created in TradingView

EUR/CHF TECHNICAL ANALYSIS

EUR/CHF has been consolidating in a 0.9973 – 1.0402 range for over 2 months.

During this faze, a descending trend line can be observed above the price and an ascending trend line is seen below the price. This has potentially set up a Bearish Pennant formation.

Not surprisingly, this consolidation phase has mixed momentum signals. A break below the ascending trend line would also put the price below all period simple moving averages (SMA).If that were to happen, it could indicate bearish momentum is unfolding.

Support may lie at the previous lows of 1.0189, 1.0089 and 0.9973. On the topside, resistance might be offered at the recent peaks of 1.0377, 1.0385 and 1.0402.

EURCHF CHART

Chart Created in TradingView

--- Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

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

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