EUR/USD Mid-Session Technical Analysis for September 26, 2018

The Euro is trading lower on below average volume as investors position themselves ahead of a series of key announcements from the U.S. Federal Reserve at 1800 GMT. The central bank is widely expected to raise its benchmark interest rate by 25 basis points. This has been priced in for weeks.

Traders also expect the Fed’s monetary policy statement to lean towards another rate hike in December. FOMC members will also provide their economic projections. What could move the Euro is the number and the pace of rate hikes in 2019. Traders want to know if the Fed will maintain its method of gradually increasing interest rates or turn more aggressive.

A “dovish” Fed should be bullish for the Euro. A hawkish Fed should help the U.S. Dollar at 1332 GMT, the EUR/USD is trading 1.1745, down 0.0019 or -0.17%.


Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been drifting lower since the formation of the closing price reversal top at 1.1816 on September 24. A trade through 1.1723 will confirm the chart pattern.

A trade through 1.1816 will negate the closing price reversal top and signal a resumption of the uptrend. A trade through 1.1526 will change the main trend to down.

The short-term range is 1.1526 to 1.1816. Its retracement zone at 1.1671 to 1.1637 is the initial downside target.

The main range is 1.1301 to 1.1816. Its retracement zone at 1.1559 to 1.1498 is the major support.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD will be determined by trader reaction to the uptrending Gann angle at 1.1766.

A sustained move under 1.1766 will signal the presence of sellers. Taking out 1.1723 will confirm the reversal top. This could trigger an acceleration to the downside with the 50% level at 1.1671 the first target, followed by an uptrending Gann angle 1.1546 and a Fibonacci level at 1.1637.

Overcoming 1.1766 will indicate the return of buyers. This could create the upside momentum needed to challenge 1.1816. Taking out this top could extend the rally into 1.1851.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.