EUR/USD Mid-Session Technical Analysis for April 28, 2017

The EUR/USD is trading higher at the mid-session. Traders did explore the weak side of the market early in the session, but have since recovered to threaten a new high for the week. There was no follow-through to the downside in reaction to Thursday’s European Central Bank’s interest rate decision and monetary policy statement that showed the central bank would maintain its easing bias.

Some traders are attributing the rally to end-of-the-month position-squaring. Later today, investors will get the opportunity to react to the latest U.S. GDP data. It is expected to show the U.S. economy grew at a rate of 1.3%.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.0905 will indicate a resumption of the uptrend after two-days of consolidation. The EUR/USD isn’t close to turning the trend to down, but it is in the window of time for a potentially bearish closing price reversal top.

The EUR/USD also begins today’s session inside a major retracement zone, bounded by 1.0819 and 1.0932. Trader reaction to this zone will set the longer-term direction of the market.

The new short-term range is 1.0601 to 1.0950. If there is a correction then look for a short-term move into its retracement zone at 1.0776 to 1.0734.

Forecast

Based on the current price at 1.0934 and the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the major Fibonacci level at 1.0932.

A sustained move over 1.0932 will indicate the presence of buyers. This could drive the market into a steep uptrending angle at 1.0961. Crossing to the strong side of this angle will put the Euro in a bullish position with the next target angle coming in at 1.1000. This is the trigger point for an even stronger rally.

A sustained move under 1.0932 will signal the presence of sellers. This could drive the EUR/USD back into yesterday’s low at 1.0851. If the selling pressure continues then look for the selling to extend into the major 50% level at 1.0819. This is followed by a potential support cluster at 1.0781 to 1.0776.

Watch the price action and read the order flow at 1.0932 all session. Trader reaction to this level will determine the direction of the market today.