EUR/USD Mid-Session Technical Analysis for August 1, 2017

The EUR/USD is trading lower shortly before the U.S. opening. There has been no follow-through to the upside following yesterday’s strong surge. The inside move suggests investor indecision and impending volatility. This probably means they are waiting to react to the slew of U.S. economic reports later today.

On Tuesday, investors will have the opportunity to react to a slew of U.S. economic reports. The major report is the ISM Manufacturing PMI. The next level of key reports are Core PCE Price Index and Personal Spending.

Minor reports include Personal Income, Final Manufacturing PMI, Construction Spending and ISM Manufacturing Prices.

I think the biggest reaction by the EUR/USD today will come after the release of the ISM Manufacturing PMI and Core PCE Price Index reports. Any report that reduces the chances of a Fed rate hike later this year will be bullish for the EUR/USD.

Technical Analysis

The main trend is up according to the daily swing chart. The trend will change to down on a trade through 1.1312. The distance between the current price and the last bottom sets up the potential for a volatile correction.

Due to the prolonged move up in terms of price and time, today’s session begins with the EUR/USD in the window of time for a potentially bearish closing price reversal top. This won’t mean the trend is turning lower, but it will likely alleviate some of the buying pressure.

There is plenty of room to the upside. The main range is 1.3993 to 1.0339. Its 50% level at 1.1266 is the primary upside target.

Forecast

Look for the upside bias to continue as long as the EUR/USD continues to hold above a pair of uptrending Gann angles at 1.1718 and 1.1692. Breaking these angles would mean the trend is changing, but it will indicate the selling is greater than the buying at current price levels.