EUR/USD Mid-Session Technical Analysis for January 2, 2018

The EUR/USD is trading sharply higher on Tuesday, the first trading session of the year. Traders said demand for the Euro is strong due to stronger European economies and expectations the European Central bank will wind down its monetary stimulus later this year.

Daily Technical Analysis

The main trend is up according to the daily swing chart. If the upside momentum continues then look for a test of the September 8 main top at 1.2092. Overtaking this level could fuel an eventual move into a major 50% level at 1.2166.

On the downside, the major support is a longer-term retracement zone at 1.1886 to 1.1823.

Daily Technical Forecast

The strong performance early in the session has put the EUR/USD in a position to challenge the main top at 1.2092 and a steep uptrending Gann angle at 1.2096.

Overtaking and sustaining a rally over 1.2096 will put the EUR/USD in an extremely bullish position. This could trigger an acceleration into the major 50% level at 1.2166.

The inability to overcome 1.2092 to 1.2096 will signal the presence of sellers. It won’t mean the trend is getting ready to turn down, but it could be an indication that the selling is greater than the buying at current price levels.

On the downside, the major support is an uptrending Gann angle at 1.1916.

Watch the price action and read the order flow on a test of 1.2092 to 1.2096. Trader reaction to this area will tell us if the buyers or sellers are in control. Look for the bullish bias to continue on a sustained move over 1.2096 and for a bearish bias to develop on a sustained move under 1.2092.