EUR/USD Mid-Session Technical Analysis for October 17, 2018

The Euro is trading lower on Wednesday against a strengthening U.S. Dollar. Traders are responding to increased demand for higher risk assets and firmer U.S. Treasury yields. Investors are also squaring positions ahead of the release of the minutes from the Fed’s September meeting. Traders will be looking for clues as to the timing and the pace of future interest rate hikes.

At 1055 GMT, the EUR/USD is trading at 1.1553, down 0.0022 or -0.19%.

At its September meeting, the Fed raised its benchmark rate 25 basis points while strongly suggesting another rate hike in December. The Fed also said it would likely raise rates three times in 2019 and once in 2020.

Daily Technical Analysis

The main trend is down according to the daily swing chart. Momentum shifted back to the downside with the formation of a second closing price reversal top in three days. The reversal top was confirmed earlier today when sellers took out yesterday’s low at 1.1565.

A trade through 1.1622 will negate the closing price reversal top and shift momentum back to the upside. A move through 1.1432 will reaffirm the downtrend.

The main range is 1.1816 to 1.1432. Its retracement zone at 1.1624 to 1.1669 is resistance.

The short-term range is 1.1432 to 1.1622. Its 50% level or pivot at 1.1527 is support. This price falls inside a major retracement zone at 1.1559 to 1.1498.

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Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to an uptrending Gann angle at 1.1552 and the 50% level at 1.1559.

A sustained move under 1.1552 will indicate the presence of sellers. This could lead to a move into the short-term pivot at 1.1527. We could see a technical bounce on the first test of this level, but if it fails then look for the selling to extend into the Fibonacci level at 1.1498 and the uptrending Gann angle at 1.1492.

If 1.1492 fails then look for the selling to extend into the next uptrending Gann angle at 1.1462. This is the last potential support angle before the 1.1432 main bottom.

A sustained move over 1.1559 will signal the return of buyers. This could trigger an acceleration to the upside with 1.1622 to 1.1624 the next upside target.

Basically, look for a downside bias on a sustained move under 1.1552. An upside bias is likely to develop on a sustained move over 1.1559.