The EUR/USD is trading lower after an earlier attempt to breakout to the upside failed to attract the attention needed to continue the move. Traders are still trying to determine whether today is a risk on or a risk off day.
The main trend is up according to the daily swing chart. However, momentum had been trending lower since the 1.1910 top on August 2. Yesterday’s closing price reversal bottom may have stopped the price slide.
A trade through 1.1689 will negate the reversal bottom and signal a resumption of the downtrend.
A sustained move over 1.1673 could trigger the start of a 2 to 3 day rally.
The new short-term range is 1.1910 to 1.1689. Its retracement zone at 1.1800 to 1.1826 is the primary upside target. Aggressive counter-trend sellers may step in on a test of this zone. They are trying to form a potentially bearish secondary lower top. Buyers are going to try to take out this zone. If successful, then 1.1689 will become a new main bottom.
The main range is 1.1312 to 1.1910. If 1.1689 fails as support then look for the selling to extend into its retracement zone at 1.1611 to 1.1540. An uptrending angle passes through this zone at 1.1572, making it a valid downside target.
If the selling is strong enough to take out 1.1689, then look for the move to extend into 1.1611. This is followed by 1.1572 and 1.1540.
If the buying is strong enough to take out 1.1673 then look for a labored rally into a series of levels at 1.1790, 1.1800 and 1.1826.