EUR/USD Mid-Session Technical Analysis for February 16, 2018

The EUR/USD is trading lower on Friday after reversing to the downside following a strong rally early in the session failed to take out a major long-term retracement level. Although the buying was strong enough to breakout over the January 25 top at 1.2537, sellers prevented the move from continuing into the Fibonacci level at 1.2597.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier today on a move through 1.2537.

The buying dried up as the EUR/USD approached 1.2597. This led to profit-taking and perhaps some aggressive counter-trend selling, driving the Forex pair lower for the session.

The market is currently forming an outside move which suggests the presence of strong sellers and long-liquidation.

The short-term range is 1.2205 to 1.2555. If the downside momentum continues, we could see a test of its retracement zone at 1.2380 to 1.2339. Since the trend is up, don’t be surprised if enough buyers arrive to fuel a technical bounce to the upside.

Daily Technical Forecast

Based on the current price action, the next downside target is the steep uptrending Gann angle at 1.2405. Watch for a technical bounce.

If 1.2405 fails as support then the selling is likely to continue into 1.2380 to 1.2339.

If the selling begins to lighten up then all we can expect is a retracement of the intraday range.