EUR/USD Forex Technical Analysis – In Position to Post Bearish Weekly Closing Price Reversal Top

Global trade tensions are driving the Euro lower at the mid-session on Friday. The U.S. Dollar is being supported by safe haven buying on concerns over an escalation of trade tensions between the United States and China as well as worries about the U.S. and Canada’s ability to reach a new NAFTA trade deal.

At 1702 GMT, the EUR/USD is trading 1.1608, down 0.0056 or -0.48%.

Euro traders are also worried about the European Union after Trump also said the European Union’s proposal to eliminate auto tariffs was “not good enough”. Trump has threatened to impose tariffs on cars assembled by German automakers Volkswagen AG, Daimler AG and BMW AG.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 1.1734 will signal a resumption of the uptrend.

The EUR/USD is also in a position to close lower for the week. A finish under 1.1623 will form a weekly closing price reversal top. This could trigger the start of a 2 to 3 week correction.

The minor trend is down. This confirms the shift in momentum. The next minor bottom is 1.1530.

The minor range is 1.1530 to 1.1734. Crossing to the weak side of its pivot at 1.1632 also confirms the shift in momentum to down.

The main range is 1.1301 to 1.1734. If the selling pressure continues then look for a break into its retracement zone at 1.1518 to 1.1466.

Daily Technical Forecast

Based on the current price at 1.1608, the direction of the EUR/USD into the close is likely to be determined by trader reaction to a steep downtrending Gann angle at 1.1614.

A sustained move under 1.1614 will indicate the presence of sellers. If this creates enough downside momentum into the close then look for the selling to extend into the uptrending Gann angle at 1.1541, followed by the retracement zone at 1.1518 to 1.1466.

A sustained move over 1.1614 could trigger a late session short-covering rally. This could lead to a retest of the pivot at 1.1632. This is followed by downtrending Gann angles at 1.1674 and 1.1704.