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James Hyerczyk

The Euro is trading slightly better on Wednesday, but volume is below average. The fact that the U.S. Treasury market is closed has a lot to do with the limited price action. The chart is also indicating that the price action is being controlled by a pair of retracement zones.

At 1144 GMT, the EUR/USD is trading 1.1351, up 0.0008 or +0.08%.

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Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher with the formation of the secondary higher bottom on November 28. This low corresponded with dovish comments from Fed Chair Jerome Powell. A trade through 1.1474 will change the main trend to up. A move through 1.1267 will signal a resumption of the downtrend.

The minor trend is up. This is also contributing to the upside momentum. A trade through 1.1305 will change the minor trend to down.

The main range is 1.1216 to 1.1474. Its retracement zone at 1.1345 to 1.1315 is acting like support.

The short-term range is 1.1474 to 1.1267. Its retracement zone at 1.1370 to 1.1395 is resistance.


Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1351, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1345.

Bullish Scenario

A sustained move over 1.1345 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to continue into the next 50% level at 1.1370. This is followed by the Fibonacci level at 1.1395.

Bearish Scenario

A sustained move under 1.1345 will signal the presence of sellers. The first downside target is the Fib level at 1.1315. This is followed closely by the minor bottom at 1.1305. Taking out this bottom will change the minor trend to down and shift momentum to the downside.

The Euro is going to have to clear the retracement zone with conviction in order to generate some movement. Otherwise, it is going to remain rangebound. Without the Treasurys to guide the price action, it will be difficult to do this today.

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