EUR/USD Mid-Session Technical Analysis for February 20, 2018

The EUR/USD is under pressure on Tuesday. The catalysts behind the weakness are rising U.S. Treasury yields and position-squaring ahead of Wednesday’s release of the latest Federal Reserve meeting minutes.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of a closing price reversal top on February 16 and the subsequent follow-through selling.

The short-term range is 1.2205 to 1.2555. Its retracement zone at 1.2380 to 1.2339 is currently being tested. Trader reaction to this zone will determine the short-term direction of the market.

The main retracement zone is 1.2235 to 1.2160. If the sell-off continues then this zone will become the primary downside target.

Daily Technical Forecast

Based on the early trade, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the short-term Fibonacci level at 1.2339.

A sustained move over 1.2339 will indicate the return of buyers. Overtaking an uptrending Gann angle at 1.2345 will indicate the buying is getting stronger. This could trigger a rally into a resistance cluster at 1.2380 to 1.2395.

The trigger point for an acceleration to the upside is 1.2395.

A sustained move under 1.2339 will signal the presence of sellers. This price is a potential trigger point for an acceleration to the downside. If selling volume increases on the move then look for a possible break into the next uptrending Gann angle at 1.2275.