Euro Technical Forecast Talking Points
- On average, Euro has its best week since April 2015, accumulating breakouts
- Technical confirmation is key with fundamental risk of the coronavirus ahead
- What is in store for EUR/USD, EUR/JPY, EUR/GBP and EUR/AUD in March?
Euro Technical Outlook
On average, the Euro just experienced its best week since April 2015 when comparing its performance against the US Dollar, Japanese Yen, British Pound and Australian Dollar. On the chart below is a majors-based Euro index which averages the single currency against the aforementioned FX. It appears that there has been a key technical breakout through resistance which goes back to November. In the week ahead, the Euro may confirm its aggressive bullish push which may precede further gains to come in the medium term.
Majors-Based Euro Index
The Euro may confirm a further upside breakout against the US Dollar in the week ahead as EUR/USD closes above key falling resistance from the beginning of this year. That has exposed the February high at 1.1095 as the near-term outlook may shift bullish from a technical standpoint. With time, that may eventually pave the way for a revisit to the January peak at 1.1239.
EUR/USD Daily Chart
The Euro also experienced a breakout against the British Pound after EUR/GBP closed above near-term falling resistance from December. Prices also took out the psychological barrier at 0.8592. Further upside tehnical confirmation may place EUR/GBP on the path towards reversing the medium-term downtrend from August. Keep a close eye on 0.8727 as closing above this point exposes 0.8727 along the way towards October highs.
EUR/GBP Daily Chart
EUR/AUD closed above peaks from 2019 as the pair climbed to levels it last saw in 2009. The immediate uptrend is being maintained by near-term rising support from February. Down the road, a potential support line from January may sustain the pair’s upward trajectory if there is a decline. For now, EUR/AUD is setting itself up to test highs from August 2009. Along the way sits Fibonacci extensions at 1.6996 and 1.7103.
EUR/AUD Daily Chart
Where the Euro struggled this past week was against the anti-risk Japanese Yen as coronavirus fears plagued stock markets. The near-term EUR/JPY downtrend is being maintained by falling resistance from January. A daily close above the psychological barrier between 120.99 to 121.39 may shift the technical bias to the upside. Downtrend resumption entails taking out 118.46 which is where EUR/JPY stumbled this past week.
EUR/JPY Daily Chart
— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter