EUR/USD Mid-Session Technical Analysis for August 22, 2018

The Euro is trading slightly lower shortly before the U.S. opening and well-ahead of the release of the latest Fed minutes at 1800 GMT. The single-currency is trading inside yesterday’s range, which suggests investor indecision and impending volatility.

At 0855 GMT, the EUR/USD is trading 1.1567, down 0.0005 or -0.04%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the closing price reversal bottom at 1.1301 on August 15.

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

A pair of retracement zones is also controlling the price action.

The main range is 1.1747 to 1.1301. Its retracement zone at 1.1524 to 1.1577 is currently being tested. Trader reaction to this zone could determine the near-term direction of the Euro.

The short-term range is 1.1628 to 1.1301. Its retracement zone at 1.1503 to 1.1465 is support.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the Fibonacci level at 1.1577 and the downtrending Gann angle at 1.1587.

A sustained move under 1.1577 will indicate the presence of sellers. If this produces enough downside momentum then look for a potential break into a 50% level at 1.1524, a Fibonacci level at 1.1503 and an uptrending Gann angle at 1.1501.

We could see a technical bounce on the first test of 1.1501, but if it fails then look for the selling to possibly extend into another 50% level at 1.1465.

A sustained move over 1.1587 will signal the presence of buyers. This is a potential trigger point for a spike into the main top at 1.1628. Taking out this top will change the main trend to up. This could then extend the rally into the next target angle at 1.1667.