EUR/USD Weekly Outlook

The EUR/USD currency pair has shown a notable rebound from a short-term low of 1.0176, gaining momentum in the past week with no immediate signs of a market peak. As we enter this week, the initial bias remains positive, focusing on the 38.2% retracement level from 1.1213 to 1.0176, which stands at 1.0572. Should this level be broken convincingly, it could signal a bullish reversal, making the target the 61.8% retracement level located at 1.0817.

The downside risk lies in breaking the minor support level at 1.0371, which would suggest a continuation of near-term bearish sentiment and likely lead to a retest of the 1.0176 low.

Looking at the larger picture, market outlook remains mixed. The decline from the 2023 high of 1.1274 could represent either the second leg of a corrective pattern stemming from the 2022 low of 0.9534, or it could indicate another downturn in a long-term bearish trend. There is significant support at the 61.8% retracement level from 0.9534 to 1.1274 at 1.0199, which would favor the corrective scenario. Furthermore, a sustained break of the 55-week Exponential Moving Average (currently at 1.0722) could imply that a new upward leg has begun.

However, if trading remains below the 1.0199 level, it would indicate that bearish sentiments are prevailing, leading to a potential retest of the 0.9534 low.

In terms of long-term trends, we see that the decline from the high of 1.6039 is still in progress, with EUR/USD trading within a descending channel. Any rebound appears capped by the 55-month Exponential Moving Average (currently at 1.0973). While consolidation may extend from the 0.9534 low and could possibly trigger another upward movement, as long as the resistance at 1.1274 holds firm, a future downside breakout looks more likely.

EUR/USD, Market, Analysis