EUR/USD Mid-Session Technical Analysis for October 28, 2016

The EUR/USD is trading higher at the mid-session, but inside the previous day for the second consecutive session. This indicates investor indecision and impending volatility. We should see volatility return today with the release of the U.S. Advance GDP at 1230 GMT. Forecasts call for a range of 1.3% to 3.6%, making the report vulnerable to surprises. The consensus is +2.5%.

Look for the EUR/USD to weaken if the number comes in above 2.5%. A weaker number is likely to fuel a breakout to the upside.

Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is not in a positon to turn the main trend to up, but there is room to the upside once a pair of potential resistance levels are taken out.

The short-term range is 1.1039 to 1.0850. Its retracement zone at 1.0944 to 1.0967 is the primary upside target. Bearish traders are going to try to form a secondary lower top on a test of this zone. Bullish traders are going to try to take out this zone and extend the rally into the next major retracement zone.

Forecast

Based on the current price at 1.0915 and the early price action, the direction of the market today is likely to be determined by trader reaction to the uptrending angle at 1.0910.

A sustained move over 1.0910 will indicate the presence of buyers with the first objective the 50% level at 1.0944. This is followed by the Fibonacci level at 1.0967. The Fib level is the trigger point for an acceleration to the upside with the next target angle coming in at 1.1039.

A sustained move under 1.0910 will signal the presence of sellers. Under this price is a series of uptrending angles at 1.0880, 1.0865 and 1.0858. The latter is the last potential support angle before the 1.0850 main bottom.

Taking out 1.0850 will signal a resumption of the downtrend with the next two targets coming in at 1.0828 and 1.0821.

Watch the price action and read the order flow at 1.0910 today. Trader reaction to this angle will tell us if the bulls are taking control, or if the bears are returning after a two-day rally.