EUR/USD Mid-Session Technical Analysis for August 25, 2016

The EUR/USD is trading slightly higher at the mid-session while posting an inside move after yesterday’s sell-off. Today’s price action suggests investor indecision and impending volatility ahead of Fed Chair Janet Yellen’s key speech on Friday.

Overall, however, the general tone the past few days suggests that investors are increasing bets that the Fed is poised to hike rates again sooner rather than later with some predicting Yellen will echo their signals.

Technically, the main trend is down according to the daily swing chart. However, momentum has been to the upside since August 5. The main trend will turn up on a trade through 1.1426. Standing in the way of this main top is a pair of minor tops at 1.1355 and 1.1366.

The main range is 1.1426 to 1.0910. Its 50% level or pivot is 1.1168. Continuing to close over this pivot gives the EUR/USD an upside bias.

The short-term range is 1.0951 to 1.1366. Its retracement zone at 1.1159 to 1.1107 is a potential downside target.

The best area to watch for support is the price cluster formed by the two 50% levels at 1.1168 to 1.1159.

Based on the current price at 1.1294, the first upside target is a long-term downtrending angle at 1.1316. Overtaking this angle could create enough upside momentum to challenge the pair of minor tops at 1.1355 and 1.1366. These are followed by another long-term downtrending angle at 1.1371.

On the downside, the first minor target is yesterday’s low at 1.1245. The daily chart opens to the downside with the next key target coming in at 1.1181.