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EUR/USD Mid-Session Technical Analysis for December 31, 2018

By:
James Hyerczyk
Published: Dec 31, 2018, 16:21 UTC

Based on the early price action and the current price at 1.1439, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at 1.1454.

EUR/USD

The Euro is edging lower on Monday on end-of-the-year position-squaring. The volume is extremely light with most of the major players on the sidelines ahead of the New Year’s holiday. Despite the early weakness, the currency could rebound later today if U.S. equity markets retreat or if U.S. Treasury yields decline. Due to the thin trading conditions, the Euro is vulnerable to wild price swings today.

At 1604 GMT, the EUR/USD is trading 1.1439, down 0.0002 or -0.01%.

EURUSD
Daily EUR/USD

Daily Technical Analysis

The main trend is up. A trade through 1.1486 will signal a resumption of the uptrend. The new higher bottom is 1.1343. A trade through this bottom will change the main trend to down.

The minor trend is also up. However, today’s lower low has turned 1.1474 into a new minor top. This is an early sign that momentum may be shifting to the downside.

Daily Technical Forecast

Based on the early price action and the current price at 1.1439, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at 1.1454.

Bullish Scenario

A sustained move over 1.1454 will indicate the presence of buyers. If this move can create enough upside momentum then look for buyers to make a run at the minor top at 1.1474. Taking out this level could trigger a surge into the main top at 1.1486. The upside momentum will continue to build if this level is taken out. This will likely lead to a test of the major top at 1.1501.

Bearish Scenario

A sustained move under 1.1454 will signal the presence of sellers. This is a potentially bearish signal because the daily chart indicates there is plenty of room to the downside with the next target angle dropping in at 1.1406.

If 1.1406 fails as support then look for a further decline into an uptrending Gann angle at 1.1391. This is another trigger point for an acceleration into the main bottom at 1.1343.

The current triangle chart pattern suggests investor indecision and impending volatility. This type of chart pattern often leads to prolonged break outs, but they need strong volume to make them work. At this time, the chart pattern is potentially bullish. Perhaps we’ll see a breakout to the upside once the volume returns to normal after the holidays.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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