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EUR/USD Mid-Session Technical Analysis for January 18, 2017

By:
James Hyerczyk
Published: Jan 18, 2017, 12:28 UTC

The EUR/USD is trading lower at the mid-session. The Forex pair is also trading inside yesterday’s range, suggesting investor indecision and impending

European Central Bank

The EUR/USD is trading lower at the mid-session. The Forex pair is also trading inside yesterday’s range, suggesting investor indecision and impending volatility. The volatility could come with the release of U.S. consumer inflation data at 1330 GMT. The monthly report is expected to show an increase of 0.3%. Annualized, this would mean that the CPI is 2.1%. This is higher than the Fed’s 2.0% target and it should increase the odds of a Fed rate hike in March.

EURUSD
Daily EUR/USD

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.0719 will signal a resumption of the uptrend. The main trend is in no position to turn down, but we are in the window of time for a potentially bearish closing price reversal top.

The main range is 1.0872 to 1.0339. Its retracement zone is 1.0668 to 1.0606. The EUR/USD is currently trading over this zone, giving it an upside bias. This zone is new support.

Forecast

Based on the current price at 1.0684 and the early price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the Fibonacci level at 1.0668.

Holding above 1.0668 will indicate that buyers are coming in to defend the trend. This could generate enough upside momentum to challenge yesterday’s high at 1.0719 and the long-term downtrending angle at 1.0737. This angle is a potential trigger point for an acceleration into the next downtrending angle at 1.0805. This is the last potential resistance angle before the 1.0872 main top.

Taking out 1.0668 will indicate the presence of sellers. This could trigger an acceleration to the downside with the next target the major 50% level at 1.0606. This is followed by a long-term downtrending angle at 1.0602 and a key uptrending angle at 1.0559.

Watch the price action and read the order flow at 1.0668 today. Trader reaction to this Fib level will tell us if the bulls or the bears are in control.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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