EUR/USD Mid-Session Technical Analysis for June 7, 2018

The Euro is trading at its highest level against the U.S. Dollar since May 16 shortly after the U.S. opening.  Shorts are aggressively covering and speculators are increasing their long bets the European Central Bank (ECB) may announce it will wind down its stimulus program by year-end at next week’s monetary policy meeting.

At 1112 GMT, the EUR/USD is trading 1.1835, down 0.0059 or +0.50%.

The catalysts behind the rally are bullish comments from a pair of ECB central bankers. Jens Weidmann, the head of Germany’s central bank, said expectations the ECB would wind down its bond-buying program by the end of this year were plausible while his Dutch counterpart, Klaas Knot, said there was no reason to continue a quantitative easing program.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will actually turn up when buyers take out 1.1997. A trade through 1.1510 will signal a resumption of the downtrend.

The minor trend is up. This move triggered the shift in momentum to the upside. The minor uptrend was reaffirmed when buyers took out 1.1830 earlier today.

The main range is 1.1997 to 1.1510. The market is currently trading on the bullish side of its retracement zone at 1.1811 to 1.1753. This is also giving the EUR/USD an upside bias. The retracement zone is new support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1821, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the Fibonacci level at 1.1811.

A sustained move over 1.1811 will indicate the presence of buyers. Taking out 1.1839, the intraday high, will indicate the buying is getting stronger. The daily chart is wide open over this price with the next major targets coming in at 1.1997 and 1.2001.

A sustained move under 1.1811 will signal the presence of sellers. This could trigger a quick break into the 50% level at 1.1753.

If 1.1753 fails then we could see an eventual correction back to the short-term retracement zone at 1.1675 to 1.1636.