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

The EUR/USD is trading slightly higher on Monday. The market followed through to the upside following Friday’s strong rally, but the buying dried up at 1.1959. Today’s session began with the Forex pair in the window of time for a closing price reversal top.

On Friday, the Forex pair surged to the upside in reaction to a speech by European Central Bank President Mario Draghi. He didn’t really say anything bullish, but traders liked the fact that he refrained from talking down the Euro.

The previous top was 1.1910. Since the rally was unexpected, most of it was probably short-covering. A break back below this level will indicate that buy stops rather than new buying was behind the rally. This is potentially bearish because it could lead to the formation of a closing price reversal top.

Technical Analysis

The main trend is up according to the daily swing chart. The trade through 1.1910 signal a resumption of the uptrend. The trend will change to down on a trade through 1.1661.

The EUR/USD is up 7 days from the last swing bottom. This puts the Forex pair in the window of time for a closing price reversal top. Now that we’ve had the higher-high, all we need is a break below Friday’s close at 1.1919 to set the potentially bearish wheels in motion.

Forecast

Based on the current price at 1.1925 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the steep uptrending angle at 1.1941.

A sustained move over 1.1941 will indicate the presence of buyers. The daily chart indicates there is plenty of room to the upside with the major 50% level at 1.2166 the next potential upside target.

A sustained move under 1.1941 will signal the presence of sellers. There is plenty of room to the downside under this angle with the next major target an uptrending angle at 1.1801.

Watch the price action and read the order flow at 1.1941 all session. Trader reaction to this angle will set the tone for the day. Don’t be surprised by a closing price reversal top.