Bullish trend resumption risks for the Euro (EURUSD forecast)

Intermediate
  • An erratic consolidation theme over the past 1-2 weeks for EURUSD since we published a bull view here in mid-August.
  • US Dollar losses over the past 24 hours since Fed Chairman Powell spoke at the Jackson Hole Economic Symposium have indicated potential for the US Dollar bear theme to resume.
  • Powell’s comments have been seen as opening the door to “lower for longer” on US interest rates, a negative for the US currency.
  • This sets the risk for EURUSD gains today and into September.

EURUSD day trade outlook: Aiming higher whilst above 1.1754/53 supports

An erratic tone Thursday with a spike above 1.1883/94 resistances to 1.1902, to then setback but still hold above our 1.1754/53 supports and then rebound overnight and into Friday, to retain bull forces from last week’s strong advance above the peak at 1.1916 to a new cycle high at 1.1966, to just keep the risk higher into Friday.

Day trade setup

  • We see an upside bias for 1.1902 and then 1.1966; a break here aims towards key 1.1996/1.2000 resistances.
  • But below 1.1754/53 aims for key 1.1697/94 supports, which we would look to try to hold; below here then opens risk down to 1.1641.

EURUSD intermediate-term outlook

The early June rally above 1.1147 set an intermediate-term bull trend.

  • Upside risks: We see an intermediate-term bull trend for 1.1996/1.2000 and 1.2414
  • What changes this: Below the 1.1697/94 support area switches the intermediate-term bull trend straight to bearish.
6 Hour EURUSD Chart
6 Hour EURUSD Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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