EUR/USD Mid-Session Technical Analysis for April 19, 2018

The Euro is trading lower shortly before the U.S. opening. The Forex pair is being driven lower by rising U.S. Treasury yields.

At 0912 GMT, the EUR/USD is trading 1.2362, down 0.0013 or -0.10%.

The early trade in June 10-year-Treasury Notes indicates that yields are expected to open higher on Thursday. On Wednesday, U.S. government debt yields rose, with short-term rates hitting multi-year highs. The yield on the benchmark 10-year Treasury note rose 5 basis points to 2.86 percent.

With the interest rate differential widening between U.S. Treasuries and Euro Zone debt instruments, the dollar is becoming a more attractive asset.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Momentum, however, had been trending higher since April 6 until the formation of a closing price reversal top at 1.2413 on April 17.

A trade through 1.2413 will signal a shift in momentum to the upside. A move through 1.2335 will confirm the closing price reversal top.

The minor trend is up. A move through 1.2413 will reaffirm the minor trend. A trade through 1.2299 will change the minor trend to down.

The EUR/USD is currently trading inside a retracement zone at 1.2354 to 1.2401. This zone is controlling the longer-term direction of the Forex pair.

The short-term range is 1.2214 to 1.2413. If the reversal top is confirmed then its retracement zone at 1.2313 to 1.2290 will become the primary downside target.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the main 50% level at 1.2354.

A trade through 1.2354 will indicate the selling is getting stronger. This could create the downside momentum needed to challenge the short-term 50% level at 1.2313 then the short-term Fibonacci level at 1.2290.

Holding 1.2354 will signal the return of buyers. If this generates enough upside momentum then we could see a retest of the main Fibonacci level at 1.2401. This level provided resistance earlier in the session.

Taking out 1.2401 will indicate the buying is getting stronger.