In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the weekly chart for the Euro vs US Dollar[1] (EUR/USD) ahead of the FOMC & ECB interest rate decisions. Review this week’s Strategy Webinar[2] for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: Euro reversed off basic trendline support[4] extending off the 2017 lows late-last month[5] with the pair rallying more than 2.3% ahead of key interest rate decisions over the next two days. The first major resistance hurdle is eyed at 1.1916/25 where the January low converges on the 38.2% retracement of the yearly range and the 52-week moving average. Ultimately a breach above yearly open resistance at 1.2005 would be needed to mark resumption of the broader uptrend. Confluence support rests at 1.1606with the next key level of significance down at 1.1448.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy[6]
Bottom line: The potential for a larger recovery remains while above the 1.16-handle. From a trading standpoint, I’m looking higher for now with an advance towards yearly open resistance to offer more favorable short-entries. Keep in mind that central bank rate decisions over the next few days are likely to fuel increased volatility in the EUR[7] &
