Euro Technical Outlook – EUR/USD, EUR/CHF vulnerable if momentum reasserts

Euro, EUR/USD, EUR/CHF – Talking Points

  • EUR/USD looks likely to test the lower end of a 6 week range
  • EUR/CHFis slightly below recent support, but tracking is lacking
  • Bearish Momentum May Unfold for the Euro, Will Prior Lows Hold?

EUR/USD TECHNICAL OUTLOOK

Since late February, EUR/USD has been caught in a range of 1.0806 to 1.1185. The lower limit of the range is the lowest since May 2020.

As the selling stalled over the past month, bearish momentum may reappear.

A bearish triple moving average (TMA) formation requires the price to be lower in the short term simple moving average (SMA), the latter being below the medium-term SMA and the medium-term SMA being below the long-term SMA. All SMAs should also have a negative gradient.

For the 10, 21, 34, 55, 100, and 200 day SMAs, the criteria for a TMA were met using any combination of these SMAs.

Support could be at 1.0837 recent low and a break of this level could see 1.0806 March low tested. Below, the March 2020 low of 1.0636 may provide support.

On the upside, potential resistance could be seen at previous highs and pivot points of 1.0945, 1.1138, 1.1185. Higher up, resistance could be seen at 1.1274, 1.1280, 1.1396, 1.1483 and 1.1495.

Resistance may also be seen at the descending trend line, currently dissecting at 1.1100. The SMAs themselves are also possible resistance levels.

Chart created in TradingView

EUR/CHF TECHNICAL ANALYSIS

EUR/CHF has a similar pattern to EUR/USD. The intra-European cross rate rallied from a low of 0.9973 in early March and is now looking to potentially reaffirm a downtrend.

This March low was the lowest EUR/CHF has traded since the Swiss National Bank (SNB) dropped protection for so-called “Switzerland” from what it perceived to be overvaluation in 2015. .

Regarding the SMAs of 10, 21, 55, 100 and 200 days, the TMA criteria were met.

Price is currently looking for a possible break below 1.0132, support that held last week. The next level of support could be at 0.9973.

On the upside, resistance could be seen at previous highs of 1.0385, 1.0402 and 1.0448.

Closer down, descending trendlines may also offer resistance, currently dissecting at 1.0250, 1.0260 and 1.0310. The latter coinciding with the 55-day SMA.

EUR/USD CHART

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

element inside the

element. That’s probably not what you wanted to do! Upload your application’s JavaScript bundle to the item instead.

Comments are closed.