EUR/USD Mid-Session Technical Analysis for May 3, 2018

The EUR/USD is trading higher early Thursday in a delayed reaction to yesterday’s U.S. Federal Reserve monetary policy statement that did little to alter market expectations for further interest rate hikes this year. Bearish traders don’t think the Fed was dovish, but with the June rate hike already priced into the market, they probably would’ve liked to see a more hawkish tone or additional hints at a fourth rate hike later this year.

Additionally, uncertainty ahead of the U.S. – China trade discussions and Friday’s U.S. Non-Farm Payrolls report may be giving investors an excuse to book profits.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, today’s early price action suggests the market may be ripe for a short-term short-covering rally.

A trade through 1.1937 will signal a resumption of the downtrend. This could lead to a test of the next main bottom at 1.1915.

On the upside, the first target is last year’s close at 1.2001. Additional resistance is a Fibonacci level at 1.2037.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the EUR/USD today is likely to be determined by trader reaction to last year’s close at 1.2001.

Regaining and sustaining a rally over 1.2001 will indicate the presence of buyers. This could trigger a rally into the Fibonacci level at 1.2037. This is a potential trigger point for an acceleration to the upside with 1.2136 the next likely upside target.

A sustained move under 1.2001 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into 1.1937, followed by 1.1915.

Taking out 1.1915 could trigger an acceleration to the downside with the next major targets coming in at 1.1736 to 1.1717.