The Euro spiked to the upside on Friday, hitting its highest level since March 26, “in a move dealers said may have been driven by anticipated currency demand arising from a Japanese bank’s plans to purchase a German multi-billion dollar aviation finance business,” according to CNBC. “Dealers said speculators were buying the euro in response to reports on Mitsubishi UFJ Financial Group’s planned purchase of the aviation financing business of Germany’s DZ Bank. As of June last year, the portfolio of that business stood at 5.6 billion Euros.
At 12:26 GMT, the EUR/USD is trading 1.1319, up 0.0064 or +0.57%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1184 will change the main trend to down. The nearest main top is 1.1448.
The minor trend is also up. A move through 1.1230 will change the minor trend to down. This will also shift momentum to the downside.
The main range is 1.1448 to 1.1184. Its retracement zone at 1.1316 to 1.1347 is controlling the near-term direction of the EUR/USD. The Forex pair is currently testing the lower or 50% level of the zone at 1.1316.
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1316.
A sustained move over 1.1316 will indicate the presence of buyers. If this move generates enough upside momentum then look for a potential surge into the 50% level at 1.1347. This is followed by a downtrending Gann angle at 1.1363.
A sustained move under 1.1316 will signal the presence of sellers. The first target is the uptrending Gann angle at 1.1307. Look for an acceleration to the downside if this angle fails with the next downside targets a downtrending Gann angle at 1.1278 and an uptrending Gann angle at 1.1264.
Since the surge in prices is being fueled by a one-time event and not a change in the fundamentals, we could see sellers come in on the first test of 1.1316 to 1.1347.