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EUR/USD Forex Technical Analysis –Trigger Point for Next Downside Acceleration is 1.1267

By:
James Hyerczyk
Published: Dec 17, 2018, 02:42 UTC

Based on Friday’s close at 1.1305 and the early price action, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at 1.1315.

EUR/USD

The Euro finished lower on Friday, pressured by softer-than-expected economic data. According to a private industry report, economic conditions worsened in the Euro Zone. The IHS Markit Flash Euro Zone PMI Index fell to 51.7 in December, its lowest level in four years. “New business inflows almost stalled, job creation slipped to a two-year low and business optimism deteriorated,” IHS Markit said in a release.

Early Monday, the EUR/USD is trading 1.1309, up 0.0004 or +0.03%.

EURUSD
Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1444 will change the main trend to up. A move through the November 28 bottom at 1.1267 will reaffirm the downtrend. This could eventually lead to a test of the November 12 main bottom at 1.1216.

For over a month, the EUR/USD has been trading inside a major retracement zone at 1.1447 to 1.1185. This zone is controlling the longer-term direction of the Forex pair.

The main range is 1.1216 to 1.1474. Its retracement zone at 1.1315 to 1.1345 is resistance.

The short-term range is 1.1474 to 1.1267. Its retracement zone at 1.1370 to 1.1395 is also resistance.

Trading on the weak side of the retracement zone is helping to contribute to the downside bias.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 1.1305 and the early price action, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at 1.1315.

Bullish Scenario

A sustained move over 1.1315 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the main 50% level at 1.1345. The EUR/USD will continue to stair step higher over 1.1345 with additional targets coming in at 1.1370 and 1.1395.

Bearish Scenario

A sustained move under 1.1315 will signal the return of sellers. If this can create enough downside momentum then look for sellers to take a run at Friday’s low at 1.1270.

The trigger point for the next acceleration to the downside is the main bottom at 1.1267. If this price is taken out then look for a possible extension of the break into another main bottom at 1.1216.

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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