EUR/USD Forecast – EUR/USD Stuck Within a Three-day Range

EUR/USD Forecast Video for 21.12.22

EUR/USD Technical Analysis

So far today the EUR/USD is trading within a three-day price range with a high of 1.0663 (Thursday’s high) and a low support level at yesterday’s low of 1.0576. The lows of the three-day range have been testing support of a long-term downtrend line following the breakdown of a rising bearish wedge trend reversal pattern last Thursday.

Conflicting Signals

A breakout above the trend line and a weekly close above it last week is bullish. While the breakdown of a rising wedge is bearish. Moving through either the high or low of the three-day range can now be watched for signs of further bullish or bearish behavior. Either the uptrend continues, the pair enters a deeper correction, or it continues its range bound consolidation.

Also, Watch Weekly Bearish Candle

There is also a helpful price level to watch on the weekly chart. Last week’s candlestick pattern forms a bearish shooting star. Bearish since price closed in the lower third of the week’s range and it occurred at the top of an uptrend. A breakdown of the candle triggers on a drop below 1.0506. It is also interesting to note that this week is an inside week so far as volatility is subdued.

Price Support Levels Include

Price levels to watch for signs of support on the downside include the Fibonacci retracement levels of the short near-term uptrend, at 1.0538 (38.1%), 1.0477 (50%) and 1.0417 (61.8%). However, there are two potentially more significant price areas to watch for support. The first is from around 1.0417 to 1.0368, consisting of the 61.8% Fibonacci retracement level, price structure (previous resistance and support), and the 200-day EMA at 1.0407.

Developing Monthly Trend is Bullish

Following an approximately 17-month steady decline off the May 2021 peak the EUR/USD triggered a bullish reversal on the monthly chart last month. Price broke out of the inside month of October where the high and low of October’s price range was contained within the prior month’s range in September. The bullish reversal was confirmed by the 14-month RSI which turned back up and above the 30 oversold level. At last week’s high the EUR/USD had risen 12.59% off the September low at 0.9536.

The point of the monthly analysis is that the EUR/USD should continue to go higher overall given the long-term monthly bullish reversal. Nevertheless, corrections will come, and we could be getting close to one now.

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