EUR/USD Mid-Session Technical Analysis for July 23, 2018

The Euro is trading slightly lower against the U.S. Dollar shortly after the U.S. opening on Monday. The single currency is being driven by the swings in the U.S. Treasury market. The Euro opened higher and rallied to its highest level since July 11 early in the session, but then turned lower for the session due to limited follow-through buying.

At 1147 GMT, the EUR/USD is trading 1.1719, down 0.0002 or -0.02%.

The early buying was fueled by the momentum created late last week when President Trump trashed Fed policy, driving the U.S. Dollar lower. Some of the buying was attributed to buy stops over the recent swing top at 1.1746.

Watch the price action in the Treasury yields for direction today. Last week’s comments from Trump were, well, just comments. The Fed is hawkish and the ECB is still dovish. That’s the longer-term indicator.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up shortly after the opening when buyers took out 1.1746. However, based on the price action after the move, buy stops rather than strong buying probably changed the trend.

If the trend is really changing then we may have to see a pullback in order to draw in more buyers.

Stopping the Euro today was a 50% level formed by the 1.1998 to 1.1509 range at 1.1753.

The main range is 1.1851 to 1.1509. Its retracement zone at 1.1680 to 1.1720 is controlling the near-term direction of the market.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the Fibonacci level at 1.1720.

A sustained move over 1.1720 will signal the presence of buyers. However, the next move will be labored because of a series of potential resistance levels at 1.1741, 1.1753, 1.1766 and 1.1784.

If buyers can take out all of these levels then it will have a clean shot at breaking out over the swing top at 1.1791. This is the trigger point for an acceleration into the next main top at 1.1851.

A sustained move under 1.1720 will indicate the presence of sellers. The next target is a downtrending Gann angle at 1.1691, followed by the 50% level at 1.1680.

Basically, look for a bullish tone over 1.1720 and a bearish tone under 1.1680.