EUR/USD Forex Technical Analysis – In Position to Test Last Year’s Close at 1.2001Based on Friday’s close at 1.1939, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the former bottom at 1.1915.
The EUR/USD finished higher on Friday, posting a higher-high, higher-low in the process. The price action helped form a new main bottom while putting the Forex pair in a position to regain its 2017 close.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The EUR/USD isn’t in a position to change the main trend to up, but there is room for a reasonable retracement of the recent 16-session sell-off.
A trade through 1.1822 will signal a resumption of the downtrend.
Daily Swing Chart Technical Forecast
Based on Friday’s close at 1.1939, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the former bottom at 1.1915.
A sustained move over 1.1915 will signal the presence of buyers. If this creates enough upside momentum, the EUR/USD could test last year’s close at 1.2001. We could see a technical bounce on the first test of this level, but if buyers can over take it, the rally could extend into a Fibonacci level at 1.2037. This price is potential resistance and a possible trigger point for an acceleration into the short-term 50% level at 1.2115.
A sustained move under 1.1915 will indicate the return of sellers. This could lead to a 50% retracement of the two-day rally from 1.1822, making 1.1895 the first target. This price is very important because aggressive counter-trend buyers are going to try to form a new secondary higher bottom on a test of this level.
If the selling continues through 1.1985 then look for a retest of 1.1822. Taking out this level could trigger a further break with potential targets coming in at 1.1736 to 1.1717.