EUR/USD Mid-Session Technical Analysis for June 4, 2018

The EUR/USD is trading higher shortly before the U.S. opening. Short-covering and speculative buying after the easing of political turmoil in Italy is helping to drive the upside action. There are no major U.S. economic reports today so the direction of the Forex pair is likely to be driven by the movement in U.S. Treasury yields.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. At this time, the main trend will change to up on a move through 1.1997. A move through 1.1510 will signal a resumption of the downtrend.

The minor trend is up. It turned up earlier today when buyers took out 1.1725. The new minor bottom is 1.1617. A trade through this level will change the minor trend to down and weaken the momentum. Upside momentum will strengthen if buyers can overcome the next minor top at 1.1830.

The nearest support is a 50% level at 1.1670.

The main range is 1.1997 to 1.1510. Its retracement zone at 1.1753 to 1.1811 is the first upside target. Since the main trend is down, sellers could show up on a test of this zone. This retracement area is controlling the near-term direction of the EUR/USD.

Daily Technical Forecast

Based on the early trade, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the main 50% level at 1.1753.

Overtaking and sustaining a rally over 1.1753 will indicate the buying is getting stronger. This could trigger a spike into the Fibonacci level at 1.1811, followed closely by a downtrending Gann angle at 1.1847.

The inability to overcome 1.1753 will signal the return of sellers. If this generates enough downside momentum, we could see a drive back into a downtrending Gann angle at 1.1697, followed by a potential support cluster at 1.1670.

The key to sustaining today’s counter-trend rally is holding above the support cluster at 1.1670. If this price fails as support then we could see an acceleration to the downside with potential targets coming in at 1.1617 and an uptrending Gann angle at 1.1590.