EUR/USD Mid-Session Technical Analysis for August 17, 2018

The Euro is trading slightly better against the U.S. Dollar on Friday. The single currency continues to be supported by the announcement of renewed trade talks between the United States and China later this month. An easing of tensions over Turkey’s currency crisis is also providing support. Considering the limited impact on European banks, the recent sell-off in the Euro appears to have been overdone.

At 1117 GMT, the EUR/USD is trading 1.1389, up 0.0011 or +0.11%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of the closing price reversal bottom on Wednesday and yesterday’s subsequent confirmation of the chart pattern. This could lead to a 2 to 3 day counter-trend rally.

A trade through 1.1301 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a move through 1.1628.

The short-term range is 1.1628 to 1.1301. Its retracement zone at 1.1465 to 1.1503 is the primary upside target. Since the main trend is down, sellers are likely to show up on a test of this zone.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Friday is likely to be determined by trader reaction to the uptrending Gann angle at 1.1381.

A sustained move over 1.1381 will signal the presence of buyers. If this move creates enough upside momentum then look for a possible extension into the 50% level at 1.1465, followed by the downtrending Gann angle at 1.1487.

A sustained move under 1.1381 will indicate the presence of sellers. This could lead to a break into a pair of uptrending Gann angles at 1.1341 and 1.1321. The latter is the last potential support angle before the 1.1301 main bottom.