EUR/USD Forex Technical Analysis – Getting Close to Value Area at 1.1040 to 1.1002

The Euro edged higher against the U.S. Dollar on Monday on extremely low pre-holiday volume. The market also posted an inside move, which suggests investor indecision and impending volatility. The single-currency was likely lifted by weaker-than-expected U.S. economic data.

U.S. Core Durable Goods Orders came in at 0.0%, below the 1.5% forecast and 0.5% previous reading. Durable Goods Orders were -2.0%, lower than the 0.2% estimate and 0.5% previous reading. New Home Sales also disappointed with 719K units versus a 730K forecast. The previous month’s report was revised lower to 710K.

On Monday, the EUR/USD settled at 1.1090, up 0.0015 or +0.13%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on December 13 at 1.1200.

A trade through 1.1200 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 1.0981.

The resistance is a long-term Fibonacci level at 1.1185.

The short-term range is 1.0879 to 1.1200. Its retracement zone at 1.1040 to 1.1002 is the primary downside target. Since the main trend is down, buyers are likely to come in on a test of this zone.

Daily Swing Chart Technical Forecast

With most of the major Forex markets on bank holiday the next two sessions, we don’t expect to see much price movement on Tuesday.

If you’re looking for value, the best thing to do is be patient and wait for a pullback into the value zone at 1.1040 to 1.1002. It’s a low risk buy for most traders since the trend is up and the exit level is close at 1.0981.

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.