EUR/USD Mid-Session Technical Analysis for September 12, 2018

The Euro is trading lower shortly after the release of the U.S. Producer Inflation (PPI) report. U.S. producer prices unexpectedly fell in August, recording their first drop in 18 months, as declines in the prices of food and a range of trade services offset an increase in the cost of energy products.

At 1325 GMT, the EUR/USD is trading 1.1580, down 0.0011 or -0.06%.

The Labor Department said on Wednesday its producer price index for final demand slipped 0.1 percent last month after being unchanged in July. August’s fall in the PPI was the first since February 2017. Economists had forecast the PPI increasing 0.2 percent in August.

In the 12 months through August, the PPI rose 2.8 percent, slowing further after July’s 3.3 percent increase. Economists were expecting an advance of 3.2 percent year-on-year.

Daily Technical Analysis

The main trend is down according to the daily swing chart, but momentum turned on Monday with the closing price reversal bottom. A trade through 1.1659 will change the main trend to up. A move through 1.1526 will negate the reversal bottom and signal a resumption of the downtrend.

The main range is 1.1301 to 1.1734. Its retracement zone at 1.1518 to 1.1466 is support.

The intermediate range is 1.1734 to 1.1526. Its retracement zone at 1.1630 to 1.1655 is resistance. This zone stopped the rally on Tuesday.

The short-term range is 1.1659 to 1.1526. Its 50% level or pivot is 1.1592. This level is controlling the price action today.

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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 the pivot at 1.1592.

A sustained move over 1.1592 will indicate the presence of buyers. This could trigger a quick rally into the downtrending Gann angle at 1.1624. We could see a technical bounce on the first test of this angle.

Overtaking 1.1624 could drive the market into the retracement zone at 1.1630 to 1.1655, followed by the main top at 1.1659.

A sustained move under 1.1592 will signal the presence of sellers. The daily chart is wide open under this level with potential targets coming in at 1.1526, 1.1518 and an uptrending Gann angle at 1.1501.