EUR/USD Mid-Session Technical Analysis for January 22, 2018

The EUR/USD is trading higher shortly before the U.S. opening on Monday. The Forex pair is rebounding after early session weakness failed to take out Friday’s low with conviction. A fresh effort made by the German Social Democrats (SPD) on Sunday to finally end the political deadlock pushed the German 10-year yields higher, thereby narrowing the 10-year US-German yields differential, which turned out to be support of the Euro.

The overall trade seems tentative amid concerns over the U.S. government shutdown although investors sold the dollar early in the session when they saw the news.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2323 will negate the closing price reversal top that stopped the rally on January 14 and signal a resumption of the uptrend.

A trade through 1.2164 will indicate the selling is getting stronger.

The short-term range is 1.2323 to 1.2164. Its 50% level or pivot is 1.2244. This price may be controlling the direction of the EUR/USD today.

On the downside, the first support is a major 50% level at 1.2166.

The main range is 1.1915 to 1.2323. Increased selling pressure is likely to trigger a move into its retracement zone at 1.2119 to 1.2071. Since the trend is up, buyers should show up on a test of this area.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the pivot at 1.2244.

A sustained move over 1.2244 will indicate the presence of buyers. This could lead to a labored rally with potential resistance angles at 1.2263, 1.2293 and 1.2308. The latter is the last potential resistance angle before the 1.2323 main top.

A sustained move under 1.2244 will signal the presence of sellers. This could drive the market into a long-term uptrending Gann angle at 1.2196.

If 1.2196 fails as support then look for the selling to extend into 1.2166 then 1.2119.