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EUR/USD Forex Technical Analysis – Strengthens Over 1.1392, Weakens Under 1.1359

By:
James Hyerczyk
Published: Dec 26, 2018, 06:42 UTC

Based on the early price action, the direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at 1.1392.

Euros

The Euro is trading slightly better early Wednesday as investors return to work after Tuesday’s U.S. bank holiday. Investors are still on bank holiday in Germany and Italy which may lead to light volume. However, this also leaves the currency vulnerable to exaggerated volatility due to the thin trading conditions. It’s often difficult to tell how much the major banks will influence the price action.

There is a slight edge to the Euro early Wednesday due to concerns over U.S. stock market volatility and the current government shutdown.

At 0628 GMT, the EUR/USD is trading 1.1406, up 0.0009 or +0.09%.

EUR/USD
Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1487 will signal a resumption of the uptrend. A move through 1.1270 will change the main trend to down.

The minor trend is also up. It will change to down on a move through the minor bottom at 1.1355. This will also shift momentum to the downside.

Daily Retracement Levels Technical Analysis

The main range is 1.1501 to 1.1216. Its retracement zone at 1.1392 to 1.1359 has been controlling the price action for over a month. Trading above this zone today is helping to support the upside bias.

The short-term range is 1.1270 to 1.1487. Its 50% level or pivot at 1.1379 is providing support.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at 1.1392.

Bullish Scenario

A sustained move over 1.1392 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the major long-term 50% level at 1.1447. Overtaking this level will indicate the buying is getting stronger with the next targets a minor top at 1.1487 and a main top at 1.1501.

Bearish Scenario

A sustained move under 1.1392 will signal the presence of sellers. This could lead to an initial labored break with potential support levels at 1.1379 and 1.1359, followed closely by the minor bottom at 1.1355.

The minor bottom at 1.1355 is the trigger point for a potential acceleration to the downside with the next major target the December 14 main bottom at 1.1270.

Basically, we’re looking for the EUR/USD to strengthen over 1.1392 and weaken under 1.1359.

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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