EUR/USD technical outlook

<p>The EUR/USD has arrived at a critical technical juncture ahead of this week’s key fundamental events, which include among other things the Eurozone PMIs (Tuesday), […]</p>

The EUR/USD has arrived at a critical technical juncture ahead of this week’s key fundamental events, which include among other things the Eurozone PMIs (Tuesday), German Ifo (Thursday), US GDP and the Jackson Hole Symposium (Friday).

As can be seen from the daily chart, below, the bears have been managing to just about cling onto resistance in the 1.1320-65 area. As well as the underside of the broken trend line, the 61.8% Fibonacci retracement level from the last swing high meets the point of origin of the breakdown on Jun 24, in this region.

Therefore, a potential break above this zone, if seen, can be a rather bullish outcome, which could then lead to another push towards the long-term resistance area between 1.1425 and 1.1500 (the previous rallies have failed to hold above this area) or higher.

But if the EUR/USD turns back lower from this 1.1320-65 region then the first key level of potential support to watch is at 1.1230, below which there is nothing significant until the 50 and 200 day moving averages at around 1.1145 and 1.1100, respectively. The next key support below these moving averages is at 1.1045 where the previous low meets a bullish trend line.

Conservative traders may therefore wish to wait for the EUR/USD to make its next move before potentially trading in the direction of the breakout.

16.08.22 Fibre

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.