EUR/USD Mid-Session Technical Analysis for August 6, 2018

The Euro is trading lower on Monday shortly before the U.S. opening. The single-currency is being pressured amid escalating trade war rhetoric between the United States and its major trading partners – China, Canada and the European Union.

At 1029 GMT, the EUR/USD is trading 1.1548, down 0.0020 or -0.18%.

The uncertainty being created by the trade tension between the US and China is driving investors out of higher risk assets and into the safety of the U.S. Dollar.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is down only four sessions from its last main top, but due to the steep decline, any bottom is likely to be created by a closing price reversal bottom. This puts the emphasis today on Friday’s close at 1.1568.

Daily Swing Chart Technical Forecast

Based on the current price at 1.1548 and the earlier price action, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to Friday’s close at 1.1568.

A sustained move under 1.1568 will indicate the selling is getting stronger. If the downside momentum continues then look for a drive into the June 28 bottom at 1.1527. We could see a technical bounce on the initial test of this level, but if it fails then look for the selling to extend into the June 21 bottom at 1.1509.

Overcoming Friday’s close at 1.1568 will signal the return of buyers. This will put the EUR/USD in a position to form a potentially bullish closing price reversal bottom.

If a move over 1.1568 begins to gain traction then look for investors to make a run at the previous main bottom at 1.1575. Overcoming this level will indicate the buying is getting stronger with the next target a steep downtrending Gann angle at 1.1587.