Euro Short-term Outlook: EUR/USD Selloff Nears Critical Yearly Support

Euro Technical Outlook: EUR/USD Short-term Trade Levels

• EUR/USD has fallen more than 2.9% from the August high after a decisive break of the September opening range.
• Euro has declined in seven of the past nine sessions and is poised for a third consecutive weekly loss.
• The selloff is approaching a major support zone near the yearly low-day close, where the risk of near-term exhaustion begins to rise.
• A sustained break below support would strengthen the case for another leg lower, while a recovery through near-term resistance would suggest a more meaningful low may be forming.
• U.S. Core PCE, Eurozone inflation and Non-Farm Payrolls highlight next week’s event risk.
• Resistance 1.1419, 1.1472 (key), 1.1501- Support 1.1355/60 (key), 1.1325, 1.1275

EUR/USD remains under heavy pressure after the September range broke lower, extending the decline from the August highs toward the lowest levels since July. The broader technical picture remains bearish but increasingly stretched momentum and the approach of major support argue for caution in chasing the move at current levels. With several key macro releases on deck, the next reaction could prove critical in determining whether the selloff extends or begins to stabilize. Battle lines drawn on the Euro short-term technical charts.

Euro Price Chart – EUR/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Short-term Technical Outlook we noted that EUR/USD had reversed off confluent uptrend resistance and that, “From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 1.1564/78- rallies would need to be limited to the median-line IF price is heading lower on this stretch with a close below needed to fuel the next leg of the decline.” Euro dropped into support later that day with the September opening range taking shape just above pivotal support at 1.1564/78.

The range broke on September 14 with Euro plunging more than 2.9% off the August highs to trade at the lowest levels since July. The decline has taken momentum into oversold territory with the daily RSI trading at the lowest levels since June. Price has now fallen seven of the past nine-days with a third consecutive weekly decline now approaching pivotal support near the low-day close of the year. While the immediate decline may be a bit stretched, the outlook remains tilted to the downside while below the weekly high.  

Euro Price Chart – EUR/USD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Notes: A closer look at Euro price action shows EUR/USD trading within the confines of a descending pitchfork extending off the September high. The bears are approaching downtrend support here with major lateral support just lower at 1.1355/60- a region defined by the 38.2% retracement of the 2025 advance and the 2026 low-day close. Look for a larger reaction there IF reached with a break / weekly close below needed to fuel the next major leg of the decline. Subsequent support objective rest with the yearly swing low at 1.1325 and the 2023 swing high at 1.1276.

Initial resistance is now eyed back the 1.618% extension of the late-August decline at 1.1419 with near-term bearish invalidation now lowered to the 61.8% retracement of the June advance at 1.1472. This level converges on the upper parallel into the start of next week and a breach / daily close above this threshold would be needed to suggest a more significant low is in place, and a larger trend reversal is underway. Subsequent resistance objectives are eyed at the August swing low at 1.1501 with a breach above 1.1578 needed to put the bulls back in control.

Bottom line: Euro is approaching pivotal support near the low close of the year, and the focus is on a reaction at this key inflection zone. From a trading standpoint, rallies would need to be limited to 1.1419 IF price is heading lower on this stretch with a daily close below 1.1355 needed to fuel the next leg lower.

Event risk remains elevated for EUR/USD into the close of the week, with President Trump hosting Chinese President Xi Jinping for a state visit Thursday. Traders will be focused on any progress—or renewed friction—over trade, tariffs, rare-earth/critical-mineral supply and investment, all of which could have implications for the dollar and broader risk sentiment. Attention then shifts to next week’s key macro releases, with U.S. Core PCE on Wednesday followed by Eurozone inflation and Non-Farm Payrolls Friday. With inflation and labor-market trends central to the Fed and ECB policy outlooks, the releases could materially reshape rate expectations on both sides of the Atlantic. Any meaningful divergence in the inflation data—or signs of renewed strength or weakness in the U.S. labor market—could shift the relative policy outlook and fuel a larger directional move in EUR/USD. Stay nimble into the monthly cross and watch the weekly closes for guidance. Review my latest Euro Technical Forecast for a closer look at the longer-term EUR/USD trade levels.

Key EUR/USD Economic Data Releases

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on Twitter @MBForex