EUR/USD Weekly Technical Forecast: Potential Euro Set up for a Bearish Trend
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
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)
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--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.