EUR/USD Mid-Session Technical Analysis for May 5, 2016

The EUR/USD is trading sharply lower at the mid-session. The market is rapidly approaching the target of the recent closing price reversal top chart pattern.

The main trend is up according to the daily swing chart. However, momentum has been to the downside since Tuesday.

The main range is 1.1214 to 1.1616. Its retracement zone at 1.1415 to 1.1368 is today’s primary downside target. Since the trend is up, buyers may come in on a test of this zone.

Based on the current price at 1.1428, the direction of the market the rest of the session will be determined by trader reaction to the downtrending angle at 1.1456 and the 50% level at 1.1415.

A sustained move under 1.1415 will indicate the selling is getting stronger. This may create enough downside momentum to challenge the next potential support angle at 1.1374, followed closely by the Fibonacci level at 1.1368.

A sustained move over 1.1456 will signal the presence of buyers. This could trigger a short-covering rally into 1.1487.

Holding between 1.1415 and 1.1456 will indicate trader indecision and likely lead to a sideways trade.