The EUR/USD is trading lower at the mid-session. Volume is light and along with volatility may be below average today because of a U.S. bank holiday.
The main trend is up according to the daily swing chart. The trend turned up on January 12 when the EUR/USD crossed the last two swing tops at 1.0652 and 1.0670. However, there was only a 14 point follow-through move. Since the move occurred on the seventh day up from a bottom, the move may have simply run out of buyers, setting up a potential short-term correction.
A trade through 1.0684 will signal a resumption of the uptrend. A move through 1.0339 will turn the main trend to down.
The main range is 1.0872 to 1.0339. Its retracement zone at 1.0606 to 1.0668 is the primary upside target. The early price action shows that investors are respecting this zone as resistance.
The short-term range is 1.0339 to 1.0684. Its retracement zone at 1.0512 to 1.0471 is the primary downside target.
Based on the current price at 1.0593 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the downtrending angle at 1.0622.
A sustained move under 1.0622 will indicate the presence of sellers. A move under the 50% level at 1.0606 will indicate the selling is getting stronger. The daily chart is open to the downside so we may see an acceleration to the downside.
If the EUR/USD begins to weaken then look for a possible test of the uptrending angle at 1.0519, followed by the 50% level at 1.0512.
A sustained move over 1.0622 will signal the presence of buyers. This move may generate enough upside momentum to challenge the main Fibonacci level at 1.0668 then the minor top at 1.0684. This top is the trigger point for a possible acceleration into the next downtrending angle at 1.0745.
Basically, look for a downside bias under 1.0606 and an upside bias to begin on a sustained move over 1.0622.