The Euro rally exhausted into uptrend resistance into the start of the month with EUR/USD threatening to snap a two-week winning streak at fresh yearly highs. Price has fallen more than 1% from the high and the near-term threat for a larger correction remains below the weekly open at 1.1775.
A break below the weekly opening-range today threatens further declines within this formation with initial support objective seen at the 1.618% extension / 2016 high at 1.1609/16 and the April high at 1.1573. Note that the April trendline converges on this threshold next week and a break / close below this slope would be needed to suggest a more significant high was registered last week / a larger reversal is underway- look for a larger reaction there IF reached. Subsequent support rests with the 23.6% retracement of the yearly range at 1.1440.
Initial resistance is eyed with the 78.6% retracement of the 2021 decline at 1.1748 and is backed closely by the objective weekly / monthly open at 1.1775/87- we’ll reserve this threshold as our bearish invalidation levels with a breach above the upper parallel (currently near ~1.1830s) ultimately needed to mark uptrend resumption. Subsequent resistance eyed at the 100% extension of the 2022 advance at 1.1917 and the 1.618% extension of the January rally at 1.1990.
Bottom line: A reversal off uptrend resistance into the monthly open threatens a larger correction here in EUR/USD. From a trading standpoint, losses should be limited to 1.1573 IF price is heading higher on this stretch with a close above the upper parallel needed to fuel the next major leg of the advance.
-MB
A break below the weekly opening-range today threatens further declines within this formation with initial support objective seen at the 1.618% extension / 2016 high at 1.1609/16 and the April high at 1.1573. Note that the April trendline converges on this threshold next week and a break / close below this slope would be needed to suggest a more significant high was registered last week / a larger reversal is underway- look for a larger reaction there IF reached. Subsequent support rests with the 23.6% retracement of the yearly range at 1.1440.
Initial resistance is eyed with the 78.6% retracement of the 2021 decline at 1.1748 and is backed closely by the objective weekly / monthly open at 1.1775/87- we’ll reserve this threshold as our bearish invalidation levels with a breach above the upper parallel (currently near ~1.1830s) ultimately needed to mark uptrend resumption. Subsequent resistance eyed at the 100% extension of the 2022 advance at 1.1917 and the 1.618% extension of the January rally at 1.1990.
Bottom line: A reversal off uptrend resistance into the monthly open threatens a larger correction here in EUR/USD. From a trading standpoint, losses should be limited to 1.1573 IF price is heading higher on this stretch with a close above the upper parallel needed to fuel the next major leg of the advance.
-MB
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.