EUR/USD Mid-Session Technical Analysis for June 26, 2018

The EUR/USD is trading lower on Tuesday with ongoing political worries in Europe contributing to today’s risk-off sentiment. Traders are saying the Euro remains vulnerable to regional political instability as German Chancellor Angela Merkel faces pressures to deal with the migration issue that has divided Europe and threatened her own government.

A slight easing of tensions over trade issues between the U.S. and European Union, and the U.S. and China is also helping the dollar catch a bid after several days of hard selling pressure.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 1.1851 will change the main trend to up. A move through 1.1509 will signal a resumption of the downtrend.

Today’s intraday early price action suggests a minor closing price reversal top may be forming.

The main resistance is a series of retracement levels at 1.1681, 1.1720 and 1.1756. This area is controlling the near-term direction of the EUR/USD. Today’s intraday rally to 1.1721 was stopped by a short-term Fibonacci level at 1.1720.

The new short-term range is 1.1509 to 1.1721. If the selling pressure continues then its retracement zone at 1.1615 to 1.1590 will become the primary downside target. Aggressive counter-trend buyers could come in on a test of this zone in an effort to form a secondary higher bottom.

Daily Swing Chart Technical Forecast

Based on the current price at 1.1677, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the 50% level at 1.1681.

A sustained move under 1.1681 will indicate the presence of sellers. If this move generates enough downside momentum then look for a test of 1.1615 to 1.1590. Watch for a technical bounce on a test of this zone. These are the counter-trend buyers. If this zone fails to hold, then 1.1721 will become a new main top.

A sustained move over 1.1681 will signal the presence of buyers. This could lead to a labored rally with targets coming in at 1.1721 and 1.1756.

The trigger point for an acceleration to the upside is 1.1756.

Watch the price action and read the order flow at 1.1681 all session. Trader reaction to this level will tell us if buyers or sellers are in control.