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

The Euro hit a new 12-month low early Monday as investors continued to leave the single-currency for the safety of the U.S. Dollar, U.S. Treasurys and the Japanese Yen. The catalyst behind the sell-off is economic turmoil in Turkey.

At 1117 GMT, the EUR/USD is trading 1.1375, down 0.0033 or -0.29%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed last week when sellers took out the previous main bottom at 1.1530. This level is new resistance. The main trend will change to up on a move through 1.1628.

The market is down 15 sessions from the July 23 main top at 1.1751, nine sessions down from the July 31 main top at 1.1747 and three sessions down from the August 8 top at 1.1628. The size and duration of the breaks puts the EUR/USD inside the window of time for a closing price reversal bottom. Counter-trend buyers should be watching for this pattern as well as short-sellers looking for a reason to book profits.

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 the steep downtrending Gann angle at 1.1388.

A sustained move under 1.1388 will indicate the presence of sellers. This Gann angle is moving down .008 per day from the 1.1628 main top. If the market continues to follow this angle then look for a move into the July 5, 2017 main bottom at 1.1312 by August 14.

A sustained move over 1.1388 will indicate the selling pressure is weakening. Crossing back over Friday’s close at 1.1410 will indicate short-covering or profit-taking is taking place. This will also put the EUR/USD in a position to form a closing price reversal bottom.

If for some reason the situation in Turkey starts to improve then we could see a further rally into the next downtrending Gann angle at 1.1508. Since the main trend is down, sellers are likely to show up on a test of this angle.