EUR/USD Mid-Session Technical Analysis for August 9, 2017

The EUR/USD is trading slightly lower shortly before the U.S. opening. The market is trading inside yesterday’s wide range which indicates investor indecision and impending volatility.

Traders are trying to figure out if the Euro is a lower yielding asset or a higher-yielding assets. Investors may dump higher yielding assets if the situation between the United States and North Korea escalates. This will take the stock market lower, but also higher-risk currencies.

It will also send investors into the U.S. Treasury Bonds which will lower yields and make the U.S. Dollar a less desirable investment. In this case, it may be supportive for the Euro.

So until they sort out their identity, the market may sit in a range. Holding the EUR/USD in a range allows traders to sort through the information before making their move.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has shifted to the downside. A trade through 1.1910 will reaffirm the uptrend.

The short-term range is 1.1910 to 1.1714. Its retracement zone is 1.1812 to 1.1835. This zone is important because bearish investors are going to try to establish a secondary lower top on a test of this zone. Bullish traders are going to try to take it out in an effort to make 1.1714 a new main bottom.

The main range is 1.1312 to 1.1910. Its retracement zone at 1.1611 to 1.1540 is the primary downside target.

Forecast

Based on the current price at 1.1737, the direction of the EUR/USD is going to be determined by trader reaction to yesterday’s low at 1.1714.

A sustained move under 1.1714 will indicate the presence of sellers. This could trigger an acceleration into the main 50% level at 1.1611.

Holding 1.1714 will indicate that buyers are coming in to defend the trend. This could lead to a rally into a cluster of numbers at 1.1810, 1.1812 and 1.1818. This is followed by another group of potential resistance points at 1.1835, 1.1838, 1.1860 and 1.1885. The latter is the last potential resistance angle before the 1.1910 main top.

Trader reaction to 1.1714 should set the tone of the market all session.