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EUR/USD TECHNICAL HIGHLIGHTS:

  • EURUSD bearish set up in place for a test of 1.2000
  • FOMC Monetary Policy Decision alongside US NFP at the back end of the week, present risk for EUR

For the intermediate-term fundamental and technical outlook on EUR/USD, check out the recently released DailyFX Quarterly Forecast.

The EURUSD range of 2018 has been a frustration to many traders, however, EURUSD did at long lost make a break through the YTD low at 1.2154, forming a near term base at 1.2050 (200DMA) after breaching the 2017 peak at 1.2093. The question among traders is whether this will be a sign for a bearish trend forming?

Looking ahead to next week, the key risk event will be the FOMC meeting and as is usually the case on the first Friday of a new month, we will see the release of the latest US NFP report for April, whereby the headline figure is expected to show a reading of 185k, while wage growth is seen remaining at 0.3%. These events will likely be the biggest market moving events of the week and could be the catalyst needed for a bearish set up.

Having broken through the range low of 1.2154, EURUSD looks intent on making a move for 1.2000, near-term support is situated at the new base of 1.2050, which also marks the 200DMA, while EURUSD selling could potentially be curbed by the 23.6% Fibonacci retracement at 1.2033 of the 2017-2018 rise (1.0340-1.2556).

In terms of topside levels, previously support at 1.2150 will act as a cap for upside potential in the pair, further on from that a cluster of DMAs with the 20, 55 and 100DMA around 1.2285-1.2300 likely to put a lid on any gains in the short-term. Alongside this, a longer-term target of the 2-month trendline (Feb-Mar peaks) at 1.2410 will likely be out of sight.

PRICECHART 1: EURUSD DAILY TIMIE-FRAME (Sep 16-Apr-18)

Euro vs. US Dollar technical analysis

Chart by IG

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 Justin McQueen, Market Analyst

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

Follow Justin on Twitter @JMcQueenFX