EUR/USD Price Forecast: Levels to Consider Ahead of the EU Summit
Euro vs US Dollar Technical Outlook
- The market rallied on the back of the US dollar weakness and Euro's strength
- EUR vs USD price- bullish momentum remained intact
EUR/USD Price Printed a Multi-Month High
Last week, EUR/USD hit a four-week high of 1.1370 and retreated after as some bulls seemed to cut back. Ultimately, the market closed the weekly candlestick modestly in the green with a 0.4% gain. Alongside that, the Relative Strength Index (RSI) remained flat around 60 and reflected a slowing bullish momentum.
On Wednesday, the pair rallied to an over four-month high of 1.1452 on the back of positive news of Coronavirus vaccine trials, combined with hopes of achieving a recovery fund deal in the EU summit taking place today and tomorrow in Brussels.
EUR/USD DAILY PRICE CHART (AUG 1, 2018 – JuLy 17, 2020) Zoomed Out
EUR/USD DAILY PRICE CHART (May 21 – JuLY 17, 2020) Zoomed IN
In late June, EUR/USD has failed on multiple occasions to break through the lower trading zone, repeatedly rebuffing efforts to put bears back in charge. As we see the chart highlights a bull flag therefore, the pair’s outlook remains positive while moving in the current trading zone 1.1508 – 1.1370.
A close below the low end of the current zone changes the outlook from positive to neutral, and may ultimately guide EURUSD’s fall towards 1.1205- around its lowest monthly level.
A further close below that could encourage bears to revisit 1.1097- the following monthly support.
On the flip side, the daily chart shows that the market rebounded from the low end of the current zone. Another close above the low end may open up a push behind EURUSD towards the high end of the zone.
EUR/USD Four-Hour PRICE CHART (May 29 – JuLY 17, 2020)
On July 14, EUR/USD traded above the downward sloping trendline resistance originating with the June 10 high at 1.1422, indicating a shift in favor of the bull’s control.
That said, any break below the bullish trend line originating from the July 14 low at 1.1325 would keep bearish potential alive.
To conclude, a break above the July 15 high at 1.1452 may cause a rally towards the high end of the current trading zone discussed above on the daily chart, while a break below 1.1358 could send EURUSD towards 1.1302. As such, the weekly support and resistance levels marked on the four-hour chart should be kept in focus.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.