Euro Forecast: EUR/USD Completes Cup-and-Handle Formation
EUR/USD may further retrace the decline from the 2024 high (1.1214) as it completes a cup-and-handle formation.
Written by
David Song
Strategist
Euro Outlook: EUR/USD
The recent rally in EUR/USD seems to have stalled as it no longer carves a series of higher highs and lows, but the exchange rate may further retrace the decline from the 2024 high (1.1214) as it completes a cup-and-handle formation.
Euro Forecast: EUR/USD Completes Cup-and-Handle Formation
EUR/USD falls from a fresh yearly high (1.1147) to pull the Relative Strength Index (RSI) back from overbought territory, and the exchange rate may face a further decline if struggles to defend the advance from the monthly low (1.0778).
Join David Song for the Weekly Fundamental Market Outlook webinar.
Nevertheless, EUR/USD may track the positive slope in the 50-Day SMA (1.0626) as it holds above the moving average, and the weakness in the exchange rate may turn out to be temporary as it clears the October high (1.1144).
With that said, EUR/USD may attempt to test the 2024 high (1.1214) as a cup-and-handle formation seems to be unfolding, but the exchange rate may negate the reversal pattern should it fail to hold within the opening range for April.
EUR/USD Chart – Daily
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
- EUR/USD snaps the recent series of higher highs and lows after struggling to close above the 1.1070 (23.6% Fibonacci retracement) to 1.1090 (38.2% Fibonacci extension) zone, and failure to hold above the 1.0940 (50% Fibonacci retracement) to 1.0960 (23.6% Fibonacci extension) region may push the exchange rate may towards the 1.0870 23.6% Fibonacci extension) to 1.0880 (23.6% Fibonacci extension) area.
- Next area of interest comes in around the monthly low (1.0778), but a cup-and-handle formation may unfold as it appears to be defending the 1.0940 (50% Fibonacci retracement) to 1.0960 (23.6% Fibonacci extension) region.
- Need a move/close above 1.1070 (23.6% Fibonacci retracement) to 1.1090 (38.2% Fibonacci extension) zone to bring 1.1170 (50% Fibonacci retracement) on the radar, with the next area of interest coming in around 1.1260 (61.8% Fibonacci extension) to 1.1280 (61.8% Fibonacci retracement).
Additional Market Outlooks
GBP/USD Pulls Back to Keep RSI Out of Overbought Zone
Canadian Dollar Forecast: USD/CAD Selloff Persists as PM Carney Pledges to Fight Trump Tariffs
USD/JPY Selloff Pushes RSI Toward Oversold Territory
Gold Price Halts Decline from Record High Ahead of Trump Tariffs
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
Web Trader platform
Our sophisticated web-based platform is packed with features.
Open an account today
Experience award-winning platforms with fast and secure execution.
Economic calendar
Related articles
Euro Short-term Outlook: EUR/USD Pullback Nears Pivotal Uptrend Support 8 28 2026
Warsh's comments accelerated the EUR/USD selloff, raising the stakes as buyers look to stabilize the broader recovery.
Gold and S&P 500 analysis: What now after Warsh’s hawkish speech?
The dollar surged across the board after the Fed Chair Kevin Warsh surprised with a hawkish-leaning speech at the Jackson Hole summit. All the bearish dollar bets that had been accumulated since last Friday on the back of data weakness and bond market troubles had to be squared and that triggered a short squeeze rally for the dollar. Gold and silver dropped, as a result, as too did bitcoin, while US indices were giving back earlier gains.
EUR/USD forecast: All eyes on Warsh at Jackson Hole - Forex Friday
For much of this week, the EUR/USD has been edging lower with the US dollar regaining some ground after last week’s sell-off that was triggered, in part, by the bond market worries. Investors have been unwilling to bet further against the US dollar so far this week ahead of Kevin Warsh’s keynote speech at the Jackson Hole summit, due later today.