EUR/USD Mid-Session Technical Analysis for July 27, 2018

The Euro is under pressure shortly before the U.S. opening and the release of the U.S. Gross Domestic Product report at 1230 GMT. Early pressure is coming from follow-through selling related to yesterday’s news that the European Central Bank clung to its easy money policy and signaled no change in its timetable to move away from ultra-low rates or end its bond purchase program.

At 0936 GMT, the EUR/USD is trading 1.1631, down 0.0012 or -0.08%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up Monday but the lack of follow-through after the move suggests the rally was fueled by short-covering and buy stops rather than aggressive buying.

Momentum is down also. It turned after the closing price reversal top on Monday and the subsequent confirmation the next session.

The minor trend is down. It turned down on Thursday when sellers took out 1.1717. This move also signaled a shift in momentum to the downside.

The price action is also being controlled by a series of retracement levels. On the upside, retracement level resistance comes in at 1.1643, 1.1664 and 1.1680.

On the downside, the next support is a short-term Fibonacci level at 1.1617. The Euro begins to open up to the downside under this level.

Daily Swing Chart 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 1.1643.

A sustained move under 1.1643 will indicate the presence of sellers. This could trigger a break into the next Fib at 1.1617. Look for the selling to intensify on a move under this level with 1.1575 the next major target. The trend will change to down on a trade through this bottom. This could lead to a steep break since the next target is 1.1527.

Overtaking and sustaining a rally over 1.1643 will indicate the return of buyers. This could lead to a labored rally with targets at 1.1664 and 1.1680. The latter is the trigger point for an acceleration to the upside.

Watch for volatility at 1230 GMT with the release of the U.S. GDP report. The estimate is 4.0 percent. The EUR/USD could break sharply if the number comes in above 4.1 percent.