EUR/USD Mid-Session Analysis for December 8, 2016

The EUR/USD is trading slightly better shortly before the European Central Bank monetary policy announcement. The central bank is widely expected to add stimulus. If it announces the end to quantitative easing then it may rally.

Technical Analysis

The main trend is up according to the daily swing chart. It was reaffirmed earlier today when the Euro traded through yesterday’s high. A trade through 1.0503 will turn the main trend to down.

The main range is 1.1299 to 1.0503. If there is a further breakout to the upside then look for a rally into its retracement zone at 1.0901 to 1.0995.

The short-term range is currently 1.0503 to 1.0805. Its 50% level or pivot comes in at 1.0654. This is the primary downside target.

 

Forecast

Based on the current price at 1.0785, the direction is likely to be determined by trader reaction to the steep uptrending angle at 1.0743.

A sustained move over 1.0743 will signal the presence of buyers. This could create enough upside momentum to challenge the longer-term downtrending angle at 1.0879. This is followed by the main 50% level at 1.0901. This is a potential trigger point for a further breakout into the Fibonacci level at 1.0995. This is another trigger point for an acceleration into the downtrending angle at 1.1089.

Breaking through and sustaining the move through 1.0743 will indicate the presence of sellers with the next two targets the pivot at 1.0654 and the short-term uptrending angle at 1.0623. This is followed by an uptrending angle at 1.0563, the last potential uptrending angle before the 1.0503 main bottom.

Watch the price action and read the order flow at 1.0743 today. Trader reaction to this angle will tell us if the buying is strong or if the sellers are taking control.