Talking Points on the Euro, EUR/USD, and Technical Forecast The long-term trendline from 2020 is critical for price action to remain on the upswing. Potential weakness is indicated by RSI Divergence and a falling MACD. Download our new 3Q trading advice from the DailyFX Free Trading Guides to read the complete Euro forecast, including the fundamental view! Is the long-term trendline strong enough to keep the EUR/USD moving higher as it approaches the 200-day SMA? During the first two months of the second quarter, the Euro outperformed the US Dollar, albeit the currency pair experienced some weakening in June. Despite this, the EUR/USD found support at a long-term trendline that runs from the 2020 March swing bottom. If the rising support level holds, the price may continue to rise in the following months. However, pricing may still be in danger of breaching lower, as evidenced by a recent plunge below the 200-day Simple Moving Average (SMA). Furthermore, after dipping below the signal line, the Moving Average Convergence Divergence (MACD) oscillator is on track to pass below its center line, indicating a bearish momentum signal. TradingView was used to construct this weekly chart of the EUR/USD currency pair. When looking at the monthly period, the 78.6 percent Fibonacci retracement level (1.2211) from the January to March move, where price stopped following a two-month surge, becomes more important. The Fib levels of 38.2 percent and 23.6 percent, on the other hand, look to be offering some support. An accelerated advance could result with a break to either side of the 78.6 percent or 23.6 percent Fibs. A negative divergence in the Relative Strength Index (RSI) between the January and May highs is a source of concern for Euro bulls (as shown by the green line on the RSI indicator). Furthermore, the MACD line is begging to move down towards its signal line, contributing to the gloomy picture seen above on the weekly timescale. TradingView was used to create this EUR/USD monthly chart. Download our new 3Q trading advice from the DailyFX Free Trading Guides to read the complete Euro forecast, including the fundamental view! —- Thomas Westwater, a DailyFX.com analyst, wrote this article. Use the comments area below to reach Thomas, or follow him on Twitter at @FxWestwateron./n
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