EUR/USD Forex Technical Analysis – Strengthens Over 1.1720, Weakens Under 1.1680

The EUR/USD trading slightly higher at mid-week and inside last week’s range. This suggests investor indecision and impending volatility.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum is trending slightly higher after the formation of the closing price reversal bottom at 1.1509 the week-ending June 22, and the subsequent confirmation the week after.

The main trend will change to up on a trade through 1.1851, while a move through 1.1509 will signal a resumption of the downtrend.

The short-term range is 1.1851 to 1.1509. Its retracement zone at 1.1680 to 1.1720 is currently being tested. This zone is controlling the near-term direction of the EUR/USD.

The main range is 1.2555 to 1.1509. If the trend changes to up then its retracement zone at 1.2032 to 1.2155 will become the primary upside target.

Weekly Technical Forecast

Based on this week’s early price action, the direction of the EUR/USD the rest of the week is likely to be determined by trader reaction to the short-term 50% level at 1.1680.

A sustained move under 1.1680 will indicate the presence of sellers. If this generates enough downside pressure then look for a possible retest of 1.1509.

A sustained move over 1.1680 will signal the presence of buyers. This could lead to a labored breakout to the upside with potential resistance a short-term Fibonacci level at 1.1720, a short-term downtrending Gann angle at 1.1731 and a longer-term downtrending Gann angle at 1.1755.

Overtaking 1.1755 could trigger a surge into another short-term downtrending Gann angle at 1.1791. This a potential trigger point for an acceleration to the upside with 1.1851 the next major target.

Watch the price action and read the order flow at 1.1680 all week. Trader reaction to this level will tell us if the buying is getting stronger or if sellers are still in control.