Advertisement
Advertisement

EUR/USD Forex Technical Analysis – Trade Through 1.1392 Confirms Closing Price Reversal Bottom

By:
James Hyerczyk
Published: Nov 29, 2018, 04:57 UTC

Based on the early price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the short-term 50% level at 1.1370.

EUR/USD

The Euro is trading higher early Thursday after posting a potentially bullish closing price reversal bottom on Wednesday. The currency rebounded yesterday from early session weakness in reaction to a drop in U.S. Treasury yields after Federal Reserve Chair Jerome Powell said he thinks the central bank’s overnight rate is “just below” a neutral level.

At 0432 GMT, the EUR/USD is trading 1.1385, up 0.0018 or +0.18%.

EURUSD
Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may have shifted to the upside with the formation of a potentially bullish closing price reversal bottom. A trade through 1.1392 will confirm the chart pattern and signal a shift in momentum. This could trigger the start of a 2 to 3 day counter-trend rally.

The EUR/USD is currently trading inside a major, long-term retracement zone at 1.1447 to 1.1185. This levels are controlling the longer-term direction of the Forex pair.

The main range is 1.1501 to 1.1216. Its retracement zone at 1.1345 to 1.1315 is new support. Trading on the strong side of this zone is also helping to give the EUR/USD a slight upside bias.

The short-term range is 1.1474 to 1.1267. The Euro is currently testing its retracement zone early Thursday at 1.1370 to 1.1395. Trader reaction to this zone will help determine the tone of the market today.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the short-term 50% level at 1.1370.

Bullish Scenario

A sustained move over 1.1370 on Thursday will indicate the presence of buyers. If this can generate enough upside momentum then look for a drive into 1.1392, followed by 1.1395.

Taking out 1.1392 will confirm the closing price reversal bottom. However, the trigger point for a potential acceleration to the upside is 1.1395. Taking out this level with conviction could trigger a breakout to the upside with 1.1447 the next major upside target.

Bearish Scenario

A failure to confirm the reversal top or sustain a move over 1.1392 will signal the return of sellers. Crossing to the weak side of the 50% level at 1.1370 will indicate the selling is getting stronger. This could trigger a labored break with potential targets at 1.1345 and 1.1315.

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.

Did you find this article useful?

Advertisement