EUR/USD technical analysis: counter-trend rally may be over already

This month’s rally in EUR/USD from the $1.1704 low touched on 31 March has already run out of steam and the earlier falls in the pair may soon resume.

EUR/USD technical analysis

So far, this month has been good for EUR/USD bulls, with the price climbing steadily from the 31 March low at $1.1704.

However, that looks like simply a rally within a broader trend lower and the rally is already running out of steam, suggesting that the longer-term downward trend may soon resume.

Euro price set to fall back

April has so far been a kind month for EUR/USD bulls, with the price climbing steadily since touching a recent low at $1.1704 on 31 March. However, the last couple of days have seen the pair moving sideways and that suggests the longer-term decline since it hit $1.2243 on 25 February could resume soon.

EUR/USD price chart, daily time frame (7 December 2020 – 8 April 2021)

If there is a decline, the key level to watch out for is that 31 March low and any drop under $1.17 would be a new 2021 low and open the way for further losses, perhaps as far as the $1.1602 low touched on 4 November last year. If this proves wrong, the key level to watch out for on the upside would be the 25 February high mentioned earlier.

Note, incidentally, that from a fundamental perspective the rally can be seen as a bout of profit-taking and short covering by EUR/USD bears that has now finished and that those bears will soon go short of the pair again.

Find out more about forex trading

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.