EUR/USD Mid-Session Technical Analysis for June 20, 2018

The Euro is trading lower on Monday, posting an inside move, which suggests investor indecision and impending volatility. On Tuesday, it was under pressure after European Central Bank President Mario Draghi called for a patient approach to European monetary policy at a forum in Portugal.

At 1128 GMT, the EUR/USD is trading 1.1565, down 0.0024 or -0.23%.

Investors continue to react to last week’s monetary policy decisions, which is helping to limit gains. The ECB decided last week to end its 2.6 trillion Euro Bond purchase program by the close of the year but said interest rates would stay unchanged at least through next summer, a wording that pushed back rate hike expectations by three months to September 2019.

While the ECB’s guidance for steady rates ‘through’ next summer is intentionally vague, policymakers said the wording means a decision only after the summer and not during one of the summer meetings.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1851 will change the main trend to down. A move through 1.1531 will signal a resumption of the downtrend.

The minor trend is also down. It changes to up on a trade through 1.1645. This move will also shift short-term momentum to the upside.

Additional resistance is being provided by a pair of 50% levels at 1.1681 and 1.1753. Holding below these levels will help maintain the downside bias.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Wednesday will be determined by trader reaction to the downtrending Gann angle at 1.1531. This angle also forms a support cluster with yesterday’s low at 1.1531.

A sustained move over 1.1531 will indicate the presence of buyers. If this move generates enough upside momentum, we could see a move into 1.1645. Taking out this level will likely fuel a rally into a resistance cluster at 1.1681 to 1.1691.

A sustained move under 1.1531 will signal the presence of sellers. This could trigger an acceleration to the downside since the next major support target doesn’t come in until 1.1312.