EUR/USD Mid-Session Technical Analysis for January 20, 2017

The EUR/USD is trading lower at the mid-session. Earlier in the session, short-covering drove the market higher than yesterday’s high, but that rally failed at 1.0693 and the market proceeded to turn lower for the session.

Yesterday, dovish comments from European Central Bank President Mario Draghi drove the Euro lower as well as solid economic data on U.S. housing. However, Fed Chair Janet Yellen fueled a short-covering rally earlier today when she said the Fed may move cautiously when raising interest rates.

Technical Analysis

The main trend is up according to the daily swing chart. The trend on the daily chart is in no danger of changing to down, however, the market is in a position to close lower on the weekly chart on a close below 1.0640.

A trade through 1.0719 will signal a resumption of the uptrend.

The main range is 1.0872 to 1.0339. Its retracement zone at 1.0606 to 1.0668 is controlling the near-term direction of the market.

The short-term direction is 1.0339 to 1.0719. If there is a break then its retracement zone at 1.0529 to 1.0484 will become the primary downside target.

Forecast

Based on the current price at 1.0638, look for a bullish tone to develop on a move over 1.0668 and a bearish tone on a move under 1.0606.

A sustained move over 1.0668 will signal the presence of buyers. This could create enough upside momentum to challenge this week’s high at 1.0719 and the nearest downtrending angle at 1.0727. This angle is the trigger point for an acceleration into the next angle at 1.0798. This is the last potential resistance angle before the 1.0872 main top.

A sustained move under 1.0606 will indicate the presence of sellers. This is followed by an uptrending angle at 1.0599 and a downtrending angle at 1.0582. This is the trigger point for an acceleration into the short-term 50% level at 1.0529.

For intraday traders, treat 1.0668 as a pivot, stronger over this price and weaker under it.