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James Hyerczyk
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EUR/USD
EUR/USD

The Euro is trading higher during the U.S. session after reversing earlier weakness. Sellers ran stops under a previous main bottom, but buyers came in slightly above a key 50%, triggering a short-covering rally.

At 1200 GMT, the EUR/USD is trading 1.1571, up 0.0017 or +0.16%.

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Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. It turned down earlier today when sellers took out the main bottom at 1.1529. The trend changes back to up on a move through 1.1659. There is also the possibility of a closing price reversal bottom.

The main range is 1.1301 to 1.1734. Its retracement zone at 1.1518 to 1.1466 is new support. Today’s low at 1.1526 came in right above the 50% level at 1.1518. I would’ve liked to see it enter the retracement zone then rally.

The short-term range is 1.1734 to 1.1526. If the rally continues then look for a test of its retracement zone at 1.1630 to 1.1655.

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Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the pivot formed by the 1.1659 to 1.1526 range. This 50% level or pivot is 1.1592.

A sustained move under 1.1592 will indicate the presence of sellers. If this move creates enough downside momentum then look for a retest of 1.1526.

If 1.1526 fails then 1.1518 will be the next target. This price has to attract aggressive counter-trend buyers or the EUR/USD will break into 1.1466.

Overcoming 1.1592 will signal that the short-covering is getting stronger. This could spike the EUR/USD into 1.1630 to 1.1655. Since the main trend is down, sellers could show up on a test of this zone.

Breaking out over 1.1655 and the main top at 1.1659 should trigger an acceleration to the upside with 1.1734 the next likely upside target.

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