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James Hyerczyk

The Euro is trading higher against the U.S. Dollar but inside last Thursday range, which suggests investor indecision and impending volatility. The single currency could remain rangebound until Thursday when the European Central Bank releases its interest rate decision and monetary policy decision. Investors are expecting the ECB to trim its already negative benchmark rate while implementing additional stimulus, which may include quantitative easing.

At 13:04 GMT, the EUR/USD is trading 1.1043, up 0.0017 or +0.16%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the September 3 closing price reversal bottom at 1.0926. The main trend will actually change to up on a trade through 1.1164, but buyers are going to have to overcome a retracement zone before we can get there.

The main range is 1.1164 to 1.0926. Its retracement zone at 1.1045 to 1.1073 is currently being tested. Overcoming this zone will indicate the buying is getting stronger. This zone is currently acting like resistance.

The minor range is 1.0926 to 1.1085. Its retracement zone at 1.1005 to 1.0987 is potential support. This zone could become a secondary higher top if aggressive counter-trend buyers come in to stop the price slide.


Daily Technical Forecast

Based on the early price action and the current price at 1.1043, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the main 50% level at 1.1045.

Bullish Scenario

A sustained move over 1.1045 will indicate the presence of buyers. This could create the upside momentum needed to overcome a downtrending Gann angle at 1.1064. This could lead to a test of the main Fibonacci level at 1.1073 and last week’s high at 1.1085.

Crossing to the strong side of the uptrending Gann angle at 1.1086 will put the EUR/USD in a bullish position.

Bearish Scenario

A sustained move under 1.1045 will signal the presence of sellers. This could trigger a break into an uptrending Gann angle at 1.1006, followed by a short-term retracement zone at 1.1005 to 1.0987.

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