EUR/USD Forex Technical Analysis – Weekly Pivot at 1.1447 Controlling Direction

The Euro closed higher last week but inside the previous week’s range. This chart pattern tends to indicate investor indecision and impending volatility. The single-currency was primarily supported by a drop in U.S. Treasury yields, which made the U.S. Dollar a less-desirable asset. The reason for the drop in yields and the decline in the dollar was likely excessive stock market volatility, which was fueled by concerns over the partial government shutdown. Traders are also reacting to expectations the Fed will take a pause from raising rates in 2019.

Last week, the EUR/USD settled at 1.1442, up 0.0073 or +0.64%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom from the week-ending November 16.

The main trend will change to up on a trade through 1.1816. A move through 1.1216 will signal a resumption of the downtrend.

The minor trend is up. This also supports the trending momentum. A trade through 1.1270 will change the minor trend to down and shift momentum to the downside.

The major retracement zone is 1.1447 to 1.1185. The EUR/USD has been trading inside this range for 10 weeks. It has been providing support.

The main range is 1.1816 to 1.1216. Its retracement zone at 1.1516 to 1.1587 is the primary upside target.

Weekly Swing Chart Technical Forecast

Based on last week’s close at 1.1442, the direction of the EUR/USD this week is likely to be determined by trader reaction to the major 50% level at 1.1447.

Bullish Scenario

A sustained move over 1.1447 will indicate the presence of buyers. The first target is a high at 1.1487. The second is a minor top at 1.1501. Taking out this level should trigger a surge into the retracement zone at 1.1516 to 1.1587. Since the main trend is down, sellers should come in on a test of this zone.

Crossing to the strong side of 1.1587 will indicate the buying is getting stronger. This should trigger a further rally into the minor top at 1.1622.

Bearish Scenario

A sustained move under 1.1447 will signal the presence of sellers. The first downside target is 1.1352, followed by the minor bottom at 1.1270.