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EUR/USD Mid-Session Technical Analysis for May 10, 2018

By:
James Hyerczyk
Published: May 10, 2018, 10:47 UTC

Based on the early price action, it looks as if the direction of the EUR/USD today is likely to be determined by trader reaction to yesterday’s low at 1.1822.

EUR/USD

The EUR/USD is trading higher shortly before the U.S. opening and the release of the April U.S. consumer inflation report at 1230 GMT. The report is expected to show that annual Core CPI inflation rose to 2.2 percent last month, which would be the highest in more than a year, from 2.1 percent in March.

On a month-to-month basis, CPI is expected to come in at 0.3%, up from -0.1% and Core CPI is expected to show a rise of 0.2%, the same as the previous month.

Traders will also get the opportunity to react to Weekly Unemployment Claims which are expected to come in at 219K, up from 211K.

 EURUSD
Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is in no position to change the main trend to up, but it is in the window of time for a potentially bullish closing price reversal bottom. This lower-low, higher-close chart pattern could trigger the start of a 2 to 3 day counter-trend rally.

A trade through 1.1822 will signal a resumption of the downtrend. If this move produces enough downside momentum, we could see a drive into a pair of main bottoms at 1.1736 and 1.1717.

Since old bottoms tend to become new tops, our first upside target is 1.1915. If the EUR/USD begins to gain traction, the rally may eventually extend to last year’s close at 1.2001 over the short-run.

Daily Technical Forecast

Based on the early price action, it looks as if the direction of the EUR/USD today is likely to be determined by trader reaction to yesterday’s low at 1.1822.

A sustained move over 1.1822 will indicate the presence of buyers with the initial target 1.1915. Look for sellers are the first test of this level, however, it is also the trigger point for the start of a rally.

A sustained move under 1.1822 will signal the presence of sellers with new short-term targets at 1.1736 and 1.1717.

If 1.1822 is taken out and the EUR/USD regains 1.1851 then a closing price reversal bottom may form.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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