EUR/USD Mid-Session Technical Analysis for September 24, 2018

The Euro is trading higher on Monday, rebounding from early session weakness. The initial move was fueled by concerns over an escalation of the trade dispute between the United States and China after the latter cancelled trade talks.

Early in the session, investors threw money at the safe-haven U.S. Dollar but the buying dried up, allowing the Euro to recover. Traders are also positioning themselves ahead of Wednesday’s U.S. Federal Reserve interest rate decision. The Fed is widely expected to raise rates 25 basis points. This has already been priced into the market. The Fed’s plan for future rate hikes will be the market moving event.

At 1238 GMT, the EUR/USD is trading 1.1769, up 0.0019 or +0.16%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside with the formation of the closing price reversal top on Friday and its subsequent confirmation earlier today.

A trade through 1.1804 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down when sellers take out 1.1526.

The minor trend is also up. A trade through 1.1650 will change the minor trend to down. This will also confirm the shift in momentum to down.

The short-term range is 1.1526 to 1.1804. Its retracement zone at 1.1665 to 1.1632 is the primary downside target. Since the main trend is up, buyers are likely to show up on a test of this zone.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the uptrending Gann angle at 1.1726.

A sustained move over 1.1726 will indicate the presence of buyers. If they can generate enough upside momentum then look for a retest of 1.1804. Overtaking this level could trigger an acceleration to the upside with the June 14 top at 1.1851 the next likely target.

A failure to hold 1.1726 will signal the return of sellers. This could trigger an acceleration to the downside with the next target the short-term 50% level at 1.1665. This is followed by a support cluster at 1.1632 to 1.1626. Since the main trend is up, buyers are likely to show up on a test of this area.