EUR/USD Mid-Session Technical Analysis for August 31, 2017

The EUR/USD is trading lower shortly before the U.S. opening. A combination of stronger U.S. economic data and worries that European Central Bank President Draghi may not like the high value of the Euro have been weighing on the Forex pair since late Tuesday.

Later today, investors will get the opportunity to react to a slew of U.S. economic data. The most important reports that could drive U.S. Treasury yields and the U.S. Dollar are Core PCE Price Index, Personal Spending and Personal Income.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on August 29.

A trade through 1.2070 will negate the chart pattern and signal a resumption of the uptrend. The next target is 1.2166. A trade through 1.1661 will change the main trend to down.

The short-term range is 1.1661 to 1.2070. Its retracement zone is 1.1866 to 1.1817. This zone is currently being tested. Since the main trend is up, buyers may come in on a test of this zone.

Forecast

Based on the current price at 1.1850 (1055 GMT) and the earlier price action, the direction of the EUR/USD today will be determined by trader reaction to the uptrending angle at 1.1861 and the 50% level at 1.1866.

A sustained move under 1.1861 will indicate the presence of sellers. This could drive the EUR/USD into the Fibonacci level at 1.1817. The daily chart opens up to the downside under this level with the next target angle coming in at 1.1761.

A sustained move over 1.1866 will signal the presence of buyers. This is followed by a steep downtrending angle at 1.1910.

Look for an acceleration to the upside on a move over 1.1910 with the next target angle coming in at 1.1990.

After the reaction to today’s reports, volume may drop as investors prepare for Friday’s U.S. Non-Farm Payrolls report.