EUR/USD Mid-Session Technical Analysis for April 13, 2018

The Euro is trading lower early Friday amid strength in the U.S. Dollar related to the easing of tensions over a Western military intervention in Syria. Despite the early “risk-on” sentiment, investors remain cautious due to the treat of geopolitical factors including an escalation of the war in Syria and heightened tensions over a potential trade war between China and the U.S.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at 1.2214 on April 6. Additionally, the closing price reversal top 1.2476 on March 27 is still exerting downside pressure.

A trade through 1.2395 will indicate upside momentum is getting stronger. The main trend will change to up on a move through 1.2476.

A move through 1.2214 will signal a resumption of the downtrend.

The resistance is a retracement zone at 1.2354 to 1.2401. This zone stopped the rally earlier in the week when sellers stepped in at 1.2395.

The short-term range is 1.2214 to 1.2395. Its retracement zone at 1.2305 to 1.2283 is the primary downside target. It was tested on Thursday and earlier today. Aggressive counter-trend buyers may be coming in to stop the selling on a test of this area. They are trying to form a secondary higher bottom.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the short-term 50% level at 1.2305.

A sustained move over 1.2305 will indicate the presence of buyers. If this move generates enough upside momentum then look for a possible rally back to 1.2354.

A sustained move under 1.2305 will signal the presence of sellers. This could trigger a fast break into the short-term Fibonacci level at 1.2283.

The Fib level is the trigger point for an acceleration to the downside. The daily chart shows there is plenty of room to the downside with 1.2214 the main target.