EUR/USD Forex Technical Analysis – October 23, 2018 Forecast

The Euro continued to slide against the U.S. Dollar on Monday on political uncertainty over Italy’s budget. Investors also expressed disappointment that Brexit negotiations with the European Union over Northern Ireland remain in flux.

The Euro mounted a strong rally early in the session but failed to hold on to those gains as investors focused on the likelihood of further political uncertainty between the European Union and Italy over the Italian government’s spending plans.

On Monday, the EUR/USD settled at 1.1466, down 0.0049 or -0.42%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1433 will negate Friday’s closing price reversal bottom. This will signal a resumption of the downtrend. A move through the next main bottom at 1.1432 will reaffirm the downtrend. This could trigger an eventual move into the August 15 main bottom at 1.1301.

The main range is 1.1301 to 1.1816. Its retracement zone at 1.1559 to 1.1498 is controlling the near-term direction of the market.

The short-term range is 1.1816 to 1.1432. Its retracement zone at 1.1624 to 1.1669 is resistance.

Daily Swing Chart Technical Forecast

Based on Monday’s dramatic reversal to the downside, the direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the main bottom at 1.1433.

Continuing to hold above 1.1433 will indicate that aggressive counter-trend buyers are coming in to support the Euro. If this creates enough upside momentum then look for buyers to challenge the main Fibonacci level at 1.1498. Overcoming this level will indicate the buying is getting stronger with targets coming in at 1.1555 to 1.1559.

Breaking through the main bottoms at 1.1433 and 1.1432 will indicate the presence of sellers, putting the EUR/USD in a vulnerable position. If sellers continue to press the Forex pair through 1.1432 then we could see an eventual move into 1.1301.