The Euro is trading higher shortly before the U.S. opening. The currency is recovering a little following yesterday’s closing price reversal top. During the early session, the chart pattern was not confirmed with prices remaining inside yesterday’s range. This tends to indicate investor indecision and impending volatility.
The single-currency rallied on Monday after European Central Bank President Mario Draghi expressed confidence in Euro Zone inflation and wages growth. However, prices broke sharply from the high of the session after Draghi reiterated that interest rates would remain at suppressed levels until after next summer.
At 1124 GMT, the EUR/USD is trading 1.1777, up 0.0030 or +0.28%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum may have shifted to the downside with the formation of the closing price reversal top at 1.1816. A trade through 1.1723 will confirm the chart pattern and signal a shift in momentum to down.
A trade through 1.1816 will negate the closing price reversal top and signal a resumption of the uptrend.
The minor trend is up. A trade through 1.1650 will change the minor trend to down. This will also signal a shift in momentum to the downside.
The short-term range is 1.1526 to 1.1816. If the reversal top is confirmed then its retracement zone at 1.1671 to 1.1637 will become the primary downside target.
- Global Stocks Mixed as US-China Trade War Intensifies, EM Central Banks Seem to Have Repelled the Attack
- U.S. Stocks – Uncertainty, Too Many Outside Forces Pressuring Shares
- The USD is on the Move ahead of Trump Addressing the General Assembly
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the uptrending Gann angle at 1.1746.
A sustained move over 1.1746 will indicate the presence of buyers. The first upside target is a minor pivot at 1.1770. Aggressive countertrend sellers could come in on a test of this level. Taking it out is likely to lead to a rally back to 1.1816. Overcoming this price will set up a possible move into the June 14 top at 1.1851.
A sustained move under 1.1746 will signal the presence of sellers. The daily chart is wide open under this angle so watch for a potential acceleration to the downside if this price is taken out with conviction. The first downside target is 1.1671, followed by a support cluster at 1.1637 to 1.1636.