Under the drag of a strong US dollar and political deadlock in Europe, the EUR/USD is heading towards an annual decline since 2024, with a drop of nearly 6%. Will the euro continue to fall in 2025?

Regarding this, technical strategist Michael Boutros has written an article analyzing and predicting from a technical perspective, as follows:

The euro continued to fluctuate within the upward waveform formed by the 2022 low point, and the April rally stalled near the resistance level of 1.1275 before falling back at the end of the second quarter. Subsequently, the euro/dollar reversed and declined, attempting to break through the support level around 1.0463 at the end of December. If this level is breached, it could mark the third consecutive month of decline and even enter a critical moment of annual turning point.

It should be noted that the monthly momentum indicator has dropped to its lowest point in over a year. If the RSI value in December closes below 40, it may indicate a significant change in the momentum structure, with negative sentiment dominating. The key support level is the parity level, while the key resistance of the broad downward trend (invalidation of bearish sentiment) is in the range of 1.1032/38, which will also be the target for early 2024.

From the weekly chart, it can be seen that the rebound in November is far away from the downward parallel range tracked since the September high. The initial weekly support level is at the volatile low of 1.0352 in 2016. Ultimately, if it falls below this downward parallel line, it could threaten the stage of further decline for the euro/dollar, targeting the key levels of the 61.8% retracement level of 1.02 and parity for 2022, which could become key areas for downward weakness or price reversal.

On the weekly chart, the resistance level is located at the November weekly high (HWC)/February weekly low (LWC) 1.0719/77. If it breaks through and closes above this level, it may indicate the formation of a more important low point and mark a larger trend reversal. The subsequent resistance levels are HWC in March (1.0939) and HWC in December at the beginning of 2024 (1.1038) - if these two levels are broken through, they may become key intervals for top weakness or price reversal.

The euro still faces the risk of further decline before entering 2025, with a focus on potential weak lows in the first half of 2025. From a trading perspective, if the price is below 1.0777, the downside risk is still significant, and guidance can be sought when the price approaches the downward parallel line. If the price breaks through and closes below 1.02, it may initiate the next major decline. For bulls, if the upward trend in 2022 continues to hold in 2025, it is necessary to ensure the emergence of new support before parity. The key front for EUR/USD has begun in 2025.