EUR/USD Mid-Session Technical Analysis for October 27, 2016

The EUR/USD is trading higher at the mid-session. The market is also posting an inside move on the daily chart that indicates trader indecision and impending volatility. The Euro is clawing back some of last week’s losses, mostly due to oversold conditions and a weaker U.S. Dollar.

The dollar is under pressure due position squaring ahead of today’s U.S. Durable Goods report and Friday’s Advance GDP report. There are also some traders who believe that next week’s Fed meeting on November 1 -2 is also exerting some pressure on the Greenback as well as the November 5 U.S. Non-Farm Payrolls report.

Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is in no position to change the main trend to up according to the daily swing chart, but we could finish the week with a potentially bullish closing price reversal bottom.

The short-term range is 1.1039 to 1.0850. Its retracement zone at 1.0944 to 1.0967 is the primary upside target. The lower or 50% level of this range was tested successfully on Wednesday.

The retracement zone at 1.0944 to 1.0967 is very important because sellers are going to try to produce a potentially bearish secondary lower top while buyers are going to try to drive the market through this zone in an effort to solidify the importance of the 1.0850 main bottom.

Forecast

Based on the current price at 1.0926, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the uptrending angle at 1.0890. This angle held as support earlier in the session.

If the upside momentum continues then look for the rally to extend into the short-term 50% level at 1.0944. This is followed by the Fibonacci level at 1.0967. This price is the trigger point for a possible acceleration to the upside with the next major target 1.1039.

Sellers are likely to come in strong if 1.0890 fails as support. This could trigger the start of a labored break with potential downside targets at 1.0870, 1.0860 and 1.0855. The latter is the last potential support angle before the 1.0850 main bottom.