EUR/USD outlook: Steep downtrend extends to new multi-month low

Slobodan Drvenica Windsor Brokers

EUR/USD

EUR/USD started the week negatively (down 0.7% until early US trading on Monday, in extension of Friday’s 0.8% drop, with total loss of 2.7% since announcement of Trump’s victory on Wednesday.

The single currency has also registered a weekly loss of 1.8% vs dollar, with near term action weighed by large weekly bearish candlestick and formation of bearish engulfing pattern on weekly chart.

Fresh strength of the US dollar pushed the euro to the lowest in over 6 months on Monday, with steep downtrend (bear-leg from 1.0936, Nov 5 lower top) eyeing key med-term support at 1.0601 (2024 low posted on Apr 16).

Firmly bearish daily technical studies add to euro-negative fundamentals (euphoria over expectations of Trump’s measures to strongly boost economic growth / fears of tariffs on imports from the EU), with partial profit-taking to spark limited correction.

Broken Fibo 76.4% (1.0745) to ideally cap, with extended upticks to stall under broken psychological 1.08 supported, now acting as solid resistance, to keep larger bears in play and provide better selling opportunities.

Res: 1.0682; 1.0745;1.0761; 1.0800.

Sup: 1.0601; 1.0516; 1.0495; 1.0448.

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.0812
2. R2 1.077
3. R1 1.0713
PP 1.0671
1. S1 1.0614
2. S2 1.0571
3. S3 1.0514

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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