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

The Euro is trading lower on Wednesday. The divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish European Central Bank continues to weigh on the single-currency as well as political uncertainty in Germany, following chancellor Angela Merkel’s decision to step down in 2021. The simmering tensions between the European Union and the Italian government over budgetary issues is also seen a bearish influence.

At 1005 GMT, the EUR/USD is trading 1.1337, down 0.0008 or -0.08%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was confirmed earlier in the session when sellers took out the closing price reversal bottom at 1.1335. If the selling continues then look for the weakness to extend into the August 15 main bottom at 1.1301.

The EUR/USD is not in a position to change the trend to up, but it is in the window of time for a closing price reversal bottom.

The minor range is 1.1422 to 1.1331. Its 50% level or pivot comes in at 1.1377. This level is controlling the short-term direction of the EUR/USD.

The short-term range is 1.1555 to 1.1331. Its retracement zone at 1.1443 to 1.1470 is resistance.

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Daily Technical Analysis 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 yesterday’s close at 1.1345.

A sustained move over 1.1345 will indicate the presence of buyers. This will also put the EUR/USD in a position to post a potentially bullish closing price reversal bottom.

If the move above 1.1345 creates enough upside momentum then look for buyers to go after the pivot at 1.1377. Taking out this level could trigger a rally into a pair of downtrending Gann angles at 1.1402 and 1.1415. Since the main trend is down, sellers could come in on a test of these angles.

A sustained move under 1.1345 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to extend into 1.1301. Taking out this level will indicate the selling is getting stronger with a steep downtrending Gann angle at 1.1275. Crossing to the weak side of this angle will put the EUR/USD in an extremely bearish position.