EUR/USD Mid-Session Technical Analysis for July 19, 2018

The Euro is trading at its lowest level against the U.S. Dollar since June 29 on Thursday. The move is being fueled by rising U.S. Treasury yields which are making the dollar a more attractive investment.

The catalyst behind the increase in yields are hawkish comments from U.S. Federal Reserve Chairman Jerome Powell. He told Congress on Tuesday and Wednesday that the economy is strong enough to handle monetary policy, which means the Fed remains on track for at least two more rate hikes this year.

At 1153 GMT, the EUR/USD is trading 1.1593, down 0.0048 or -0.41%.

Powell’s remarks also highlight the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish European Central Bank.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Wednesday after the trade through 1.1613. The next target is the June 28 bottom at 1.1527.

The EUR/USD is also trading on the weak side of a retracement zone at 1.1680 to 1.1720. This is helping to generate the downside bias. Both levels are new resistance.

Daily Technical Forecast

Based on the early price action and the current price at 1.1593, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at 1.1609.

A sustained move under 1.1609 will indicate the selling is getting stronger. This could trigger a surge into the next uptrending Gann angle at 1.1559. This is the last potential support angle before the main bottoms at 1.1527 and 1.1509.

A sustained move over 1.1509 will signal the presence of buyers. This could lead to a labored rally with target angles coming in at 1.1631 and 1.1666. These are followed by the 50% level at 1.1680. With the main trend down, sellers are likely to show up on a test of these levels.

Watch the price action and read the order flow at 1.1609 all session. Trader reaction to this angle will tell us if the selling is getting stronger, or if aggressive buyers are coming in to take profits and stop the price slide.