EUR/USD Mid-Session Technical Analysis for September 27, 2018

The Euro is under pressure on Thursday on media reports that an Italian budget meeting was likely to be delayed. The reaction by traders suggests investors have already forgotten about yesterday’s series of U.S. Federal Reserve announcements. Fueling the worries today are concerns the ruling parties will push for a bigger deficit target.

Additionally, investors were spooked by a report from Italian daily La Stampa that Economy Minister Giovanni Tria “was ready to leave.” However, this headline was downplayed by a spokeswoman for the ministry who denied that the minister planned to quit.

On Wednesday, the Fed raised rates, made a major change to its policy statement and presented economic views that matched previous forecasts. Essentially, the Fed did not provide strong direction for currencies.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal top at 1.1816 on September 24.

A trade through 1.1816 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is also up. A move through 1.1650 will change the minor trend to down. This will also shift momentum to the downside. Taking out the next minor bottom at 1.1617 will reaffirm the change in the minor trend.

The short-term range is 1.1526 to 1.1816. Its retracement zone at 1.1671 to 1.1637 is the first downside target.

The main range is 1.1301 to 1.1816. Its retracement zone at 1.1559 to 1.1498 is the major support zone.

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Daily Technical Forecast

Based on the early price action and the downside momentum, the first target today is the minor 50% level at 1.1671. This is followed by an uptrending Gann angle at 1.1656 and a minor Fibonacci level at 1.1637. Since the main trend is up, buyers are likely to come in on a test of this area.

If 1.1637 fails as support then look for the selling to extend into the longer-term uptrending Gann angle at 1.1611.

Although there is downside pressure today, we are looking for buyers to show up on a test of 1.1671 to 1.1637.

On the upside, the resistance is a downtrending Gann angle at 1.1756. This angle stopped the rally earlier in the session.