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EUR/USD Forex Technical Analysis – September 12, 2018 Forecast

By:
James Hyerczyk
Published: Sep 12, 2018, 05:27 UTC

Based on the price action earlier this week, the direction of the EUR/USD the rest of the week is likely to be determined by trader reaction to the 50% level at 1.1518. Essentially, in order to start generating some upside momentum, aggressive counter-trend buyers are going to have to form a secondary higher bottom. Holding 1.1518 this week will be the first sign that enough buyers are coming in to create this potentially bullish chart pattern.

EUR/USD

The Euro is trading slightly higher at mid-week, recovering from two-weeks of selling pressure. Traders are paying attention to Brexit negotiations, global trade issues and rising U.S. Treasury yields.

Early Wednesday the Euro is holding steady ahead of reports on Italian Industrial Production, Euro Zone Industrial Production, and the Italian Quarterly Unemployment Rate.

The big event is in the U.S. with the release of the August Producer Price Index (PPI) at 1230 GMT. The PPI is expected to rise 0.2%, up from the previously reported flat performance in July. Core PPI is also expected up inch higher to 0.2%, up from the previously reported 0.1% gain.

At 0504 GMT, the EUR/USD is trading 1.1588, down 0.0016 or -0.14%. Last week, it closed at 1.1553.

EURUSD
Daily EUR/USD

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at 1.1301, the week-ending August 17.

A trade through 1.1734 will change the main trend to up on the weekly chart. A move through 1.1301 will negate the closing price reversal bottom and signal a resumption of the downtrend.

Several 50% levels could play a role in establishing the weekly direction of the EUR/USD. The first 50% level comes in at 1.1576. This is followed by another 50% level at 1.1518. The longer-term 50% level is 1.1447.

Weekly Swing Chart Technical Forecast

Based on the price action earlier this week, the direction of the EUR/USD the rest of the week is likely to be determined by trader reaction to the 50% level at 1.1518.

A sustained move over 1.1518 will indicate the presence of buyers. Overtaking and sustaining a move over 1.1576 will indicate the buying is getting stronger. If this move creates enough upside momentum then don’t be surprised if buyers make a run at the swing top at 1.1734.

Overtaking 1.1734 will change the main trend to up on the weekly chart. This could easily lead to a test of the next two main tops at 1.1791 and 1.1851.

A failure to hold 1.1518 will signal the presence of sellers. This could spike the EUR/USD into the major 50% level at 1.1447. Buyers could come in on the first test of this level, but if it fails then look for a potential acceleration into the main bottom at 1.1301 over the near-term.

Essentially, in order to start generating some upside momentum, aggressive counter-trend buyers are going to have to form a secondary higher bottom. Holding 1.1518 this week will be the first sign that enough buyers are coming in to create this potentially bullish chart pattern.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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