EUR/USD Forex Technical Analysis – Trading Inside Weekly Retracement Zone at 1.1447 to 1.1185

The Euro closed lower last week with the move driven by a stronger U.S. Dollar. Safe-haven buying helped drive the greenback higher. Traders were buying the dollar as protection against an unfavorable outcome from the crucial trade talks this week-end between U.S. President Trump and China’s President Xi Jinping. A favorable outcome is likely to drive the Euro sharply higher this week.

Last week, the EUR/USD settled at 1.1321, down 0.0018 or -0.16%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. The EUR/USD isn’t close to turning the main trend higher according to the weekly chart. However, the closing price reversal bottom the week-ending November 16 suggests buyers may be coming in to support the Euro. A trade through 1.1215 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through 1.1474 will change the minor trend to up. This will shift momentum to the upside. Taking out the next minor top at 1.1501 will reaffirm the shift in momentum.

Weekly Technical Forecast

The EUR/USD is currently trading inside a major retracement zone at 1.1447 to 1.1185. Trader reaction to this zone will determine the longer-term direction of the Forex pair.

Bullish Scenario

The first upside target this week is a downtrending Gann angle at 1.1416. Since the main trend is down, sellers are likely to come in on the first test of 1.1416. Overcoming this angle will be a sign of strength with 1.1447 the next target.

Crossing to the strong side of 1.1447 will put the EUR/USD in a position to challenge a pair of minor tops at 1.1474 and 1.1501.

Breaking out over 1.1501 could create the upside momentum needed to challenge the next downtrending Gann angle at 1.1616.

Bearish Scenario

On the downside, the first target is 1.1215. If this fails then look for the selling to extend into the major Fibonacci level at 1.1185. Taking out 1.1185 could trigger a steep break into a downtrending Gann angle at 1.1016. Crossing to the weak side of this angle will put the EUR/USD in a bearish position.