EUR/USD Mid-Session Technical Analysis for April 2, 2018

The EUR/USD is trading higher on Monday, shortly before the U.S. opening. Volume is below average with the banks closed in Europe because of an extended Easter holiday.

The price action is being fueled by a weaker U.S. Dollar. It weakened after China announced tariffs against the U.S. Later today at 1400 GMT, we’re likely to see a reaction to the U.S. ISM Manufacturing PMI report. It is expected to come in at 60.1. A lower-than-expected number should underpin the Euro.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the 1.2476 main top on March 27. On Friday, the Euro posted a reversal to the upside, but this was accomplished under thin holiday conditions.

A trade through 1.2239 will change the main trend to down. A move through 1.2476 will negate the closing price reversal top and signal a resumption of the uptrend.

A new minor bottom was formed at 1.2283.

On the upside, resistance is a retracement zone at 1.2354 to 1.2401. On the downside, the nearest support is a 50% level at 1.2235.

Daily 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 a steep downtrending Gann angle at 1.2316.

A sustained move over 1.2316 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of the 50% level at 1.2354. This is followed by a pair of Gann angles at 1.2373 and 1.2396.

A sustained move under 1.2316 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to extend into 1.2283, followed by a long-term uptrending Gann angle at 1.2263.