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 steep uptrending Gann angle at 1.2235.
The EUR/USD is trading higher shortly before the U.S. opening. The Forex pair rallied to 1.2295 earlier in the session, falling short of the 1.2323 main top, before giving back more than half of its gains. The EUR/USD currently in a critical position on the daily chart. At current levels, the rally could continue to a new high, or a secondary lower top could form.
The main trend is down according to the daily swing chart, however, Wednesday’s closing price reversal top has slowed down the upside momentum.
A trade through 1.2323 will negate the chart pattern and signal a resumption of the uptrend. A move through 1.2164 will change the minor trend to down.
The short-term range is 1.2323 to 1.2164. Its 50% level or pivot at 1.2244 is controlling the short-term direction of the market.
The main range is 1.1915 to 1.2323. Its retracement zone at 1.2119 to 1.2071 is the primary downside target.
A major long-term 50% level comes in at 1.2166. This level stopped the selling on Thursday.
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 steep uptrending Gann angle at 1.2235.
A sustained move over 1.2235 will indicate the presence of buyers. Overcoming the pivot at 1.2244 will indicate that the buying is getting stronger. Minor resistance angles drop in at 1.2283 and 1.2303. The latter is the last potential resistance before the 1.2323 main top.
A sustained move under 1.2235 will signal the presence of sellers. This could trigger an acceleration into potential targets at 1.2176 and 1.2166.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.