EUR/USD Mid-Session Technical Analysis for May 26, 2016

The EUR/USD is trading higher at the mid-session. On Wednesday, the market formed a potentially bullish closing price reversal bottom. This chart pattern was confirmed earlier in the session. It could lead to a 2 to 3 day rally.

The main trend is down according to the daily swing chart. The trend will turn up on a trade through 1.1242. A move through 1.1126 will negate the reversal bottom and reestablish the downtrend.

The short-term range is 1.1242 to 1.1126. Its 50% level or pivot comes in at 1.1184. This price is currently being tested.

Based on the current price at 1.1184, the direction of the market today is likely to be determined by trader reaction to the pivot at this price.

A sustained move over 1.1184 will indicate the presence of buyers. This could create enough upside momentum to challenge the next downtrending angle at 1.1212. This is followed closely by the major 50% level at 1.1219.

The 50% level at 1.1219 is a potential trigger point for an acceleration into the 1.1242 main top.

The inability to hold above 1.1184 will signal the presence of sellers. Crossing to the weak side of the downtrending angle at 1.1182 will indicate the selling is getting stronger. This could fuel an acceleration to the downside with the next targets the reversal bottom at 1.1126 and the major Fibonacci level at 1.1125.

Watch the price action and read the order flow at 1.1184 today. Trader reaction to this level will tell us if the buying is getting stronger, or if the sellers are regaining control.