James Hyerczyk
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The Euro is trading lower against the U.S. Dollar on Wednesday, shortly after the U.S. opening. Comments from President Trump regarding additional tariffs may be weighing on prices. The turmoil in Hong Kong is also helping to boost the greenback’s appeal as a safe-haven currency. Additionally, traders are positioning themselves ahead of a U.S. consumer inflation report and testimony from Fed Chair Jerome Powell later today.

At 12:14 GMT, the EUR/USD is trading 1.1009, up 0.0001 or +0.01%.

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Euro Zone bond yields fell on Wednesday after U.S. President Donald Trump threatened China with further tariffs if it fails to sign a trade deal, dimming the optimism that has hurt bond markets in recent weeks.


Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out yesterday’s low.

The main trend will change to up on a trade through 1.1176. This is highly unlikely, however, the nine day sell-off has put the EUR/USD inside the window of time for a potentially bullish closing price reversal bottom.

The minor trend is also down. Earlier today, the EUR/USD stopped at 1.0999, just slightly above the October 15 main bottom at 1.0991. A trade through this minor bottom will reaffirm the downtrend.

The main range is 1.0879 to 1.1179. Its retracement zone at 1.1029 to 1.0994 is currently being tested. This zone is controlling the near-term direction of the EUR/USD.


Daily Technical Forecast

Based on the early price action and the current price at 1.1009, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the support cluster at 1.0996 to 1.0994.

Bullish Scenario

A sustained move over the downtrending Gann angle at 1.0996 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the 50% level at 1.1029, followed closely by the uptrending Gann angle at 1.1034. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.0994 will signal the presence of sellers. If this move attracts enough sellers, the EUR/USD could break sharply into the next uptrending Gann angle at 1.0957.

Side Notes

A close over 1.1009 will form a closing price reversal bottom.

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