EUR/USD Mid-Session Technical Analysis for July 31, 2018

The Euro is trading higher against the U.S. Dollar on Tuesday with investors seemingly taking advantage of thin trading conditions ahead of the start of the Fed’s two-day monetary policy meeting.

At 1200 GMT, the EUR/USD is trading at 1.1735, up 0.0030 or +0.26%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at 1.1751 on July 23. Additionally, the minor trend is also down. This indicator also controls the momentum.

Today’s rally has put the EUR/USD in a position to take care of momentum and the minor trend. Additionally, a trade through 1.1751 will negate the closing price reversal top and signal a resumption of the uptrend.

The new main bottom is 1.1621. A trade through this bottom will change the main trend to down.

The main range is 1.1851 to 1.1509. Its retracement zone at 1.1680 to 1.1720 is controlling the longer-term direction. Currently, the EUR/USD is trading on the strong side of this zone, giving it an upside bias.

The short-term range is 1.1751 to 1.1621. Its retracement zone at 1.1663 to 1.1642 is support. This zone stopped the selling late last week.

Daily Swing Chart Technical Forecast

Based on the early trade and the current price at 1.1739, the direction of the EUR/USD the rest of the day should be determined by trader reaction to the Fibonacci level at 1.1720.

A sustained move over 1.1720 will indicate the presence of buyers. If this generates enough upside momentum then look for a potential spike through 1.1745 and 1.1751, possibly into 1.1791.

A sustained move under 1.1720 will signal the presence of sellers. This could signal the end of today’s rally. The daily chart is open under this level with a pair of 50% levels at 1.1680 and 1.1663 the next likely targets.