Based on the early price action and the current price at 1.1438, 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 1.1450.
The Euro is trading higher against the U.S. Dollar Monday. Helping to pressure the U.S. Dollar are Friday’s dovish comments from U.S. Federal Reserve Chairman Jerome Powell. The Fed Chief said the central bank will be more accommodative by exercising patience in raising rates, diminishing fears of a hawkish Fed in 2019. Powell’s comments also relieved fears that the Fed may be making a policy error by tightening too fast.
At 1120 GMT, the EUR/USD is trading 1.1438, up 0.0040 or +0.35%.
The main trend is down according to the daily swing chart. However, momentum shifted higher on January 3 and its confirmation on Friday. The main trend will change to up on a trade through 1.1497. A trade through 1.1497 will change the main trend to up. A move through 1.1309 will negate the closing price reversal bottom and signal a resumption of the downtrend.
Based on the early price action and the current price at 1.1438, 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 1.1450.
Taking out and sustaining a rally over 1.1450 will indicate the presence of buyers. This could create enough upside momentum to challenge the next downtrending Gann angle at 1.1475. This is the last potential resistance angle before the 1.1501 main top.
The inability to overcome or sustain a rally over 1.1450 will signal the presence of sellers. If this generates enough downside momentum then look for a break into the long-term uptrending Gann angle at 1.1406. This is followed closely by another downtrending Gann angle at 1.1399. This angle provided support earlier in the session.
Look for an acceleration to the downside if sellers take out 1.1399 with conviction. The first target is a 50% level at 1.1379.
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.