EUR/USD Mid-Session Technical Analysis for August 29, 2017

The EUR/USD is trading higher on Tuesday. The market soared past 1.2000 earlier in the session as speculators and investors grew increasingly bullish about it value after European Central Bank President Mario Draghi refrained from talking down the currency on Friday at the Jackson Hole central bankers’ symposium.

It wasn’t only speculation that the ECB will soon begin reducing stimulus that is driving the single-currency higher. It’s also investor interpretation of U.S. monetary policy as well as looming fiscal issues.

Technical Analysis

The main trend is up according to the daily swing chart. Its next major target is the major 50% level at 1.2166.

The EUR/USD is also up eight days from its last bottom, putting the market in a position to post a potentially bearish closing price reversal top. Given the size and duration of the current rally, I don’t think it will be a price level that signals the end of this rally, but rather a potentially bearish chart pattern.

Forecast

Based on the current price at 1.2038 and the earlier price action, the direction of the EUR/USD is likely to be determined by trader reaction to the steep uptrending angle, moving up at a pace of .004 per day from the 1.1661 main bottom. This angle comes in at 1.1981 today.

A sustained move over 1.1981 will indicate that new buyers are supporting the market as opposed to just aggressive short-covering. This may create enough upside momentum to fuel an eventual rally into at least 1.2166.

A sustained move under 1.1981 will signal the presence of sellers. The daily chart is wide open under this Gann angle with the next potential Gann angle target coming in at 1.1821.

If you continue to play the uptrend then all you have to worry about at this time is a closing price reversal top. This chart pattern doesn’t mean the trend is getting ready to turn lower, but it will indicate that the selling is greater than the buying at current price levels.