EUR/USD Mid-Session Technical Analysis for December 28, 2018

The Euro is trading higher against the U.S. Dollar, trying to pick up the momentum generated earlier in the week. Although U.S. stock markets are set to open higher for a third session, Euro traders realize this is not an indication that all the potentially bearish issues have gone away. The dollar is still feeling the pressure from the partial government shutdown and increased tensions from U.S.-China relations.

At 1325 GMT, the EUR/USD is trading 1.1451, up 0.0018 or +0.14%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1486 will signal a resumption of the uptrend. This could trigger a rally into the November 7 main top at 1.1501. This is a potential trigger point for an acceleration to the upside.

Today’s early rally has formed a new higher main bottom at 1.1343. A trade through this level will change the main trend to down.

The main range is 1.1501 to 1.1216. Its retracement zone at 1.1392 to 1.1359 is controlling the direction of the EUR/USD. Today’s price action makes this zone new support. Trading on the strong side of this zone is helping to generate some upside momentum.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the major 50% level at 1.1447. This is a long-term retracement level.

Bullish Scenario

A sustained move over 1.1447 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the last main top at 1.1486, followed closely by 1.1501.

Bearish Scenario

A sustained move under 1.1447 will signal the presence of sellers. The daily chart is wide open to the downside so this could generate some intraday downside momentum. The nearest downside target is the Fibonacci level at 1.1392, followed by the 50% level at 1.1359 and the main bottom at 1.1343.