EUR/USD Mid-Session Technical Analysis for July 13, 2017

The EUR/USD is trading lower shortly before the U.S. opening. On Wednesday, the Forex pair formed a potentially bearish closing price reversal top. This chart pattern was confirmed earlier in the session when sellers took out yesterday’s low at 1.1391.

The initial formation indicates the selling is greater than the buying at current price levels, however, if the move is related to a drop in German Bund yields then we could see further downside pressure and a possible change in trend over the near-term.

Technical Analysis

The main trend is up according to the daily swing chart. The closing price reversal top, however, indicates a possible shift in momentum to down.

A trade through 1.1489 will negate the chart pattern and signal a resumption of the uptrend. This could lead to an eventual test of the May 3, 2016 main top at 1.1616.

A trade through 1.1312 will change the main trend to down. The next major bottom comes in at 1.1118.

The short-term range is 1.1312 to 1.1489. Its retracement zone is 1.1401 to 1.1380. This zone is currently being tested. Since the main trend is up, buyers are likely to come in on a test of this zone in an attempt to form a potentially bullish secondary higher bottom.

Sellers are going to try to take out the retracement zone in an effort to make 1.1489 a new main top. This could possibly lead to a change in trend to down.

The main range is 1.1118 to 1.1489. If the main trend changes to down then look for a test of its retracement zone at 1.1304 to 1.1260. An uptrending angle also passes through this zone at 1.1288, making it a valid downside target.

Forecast

Based on the current price at 1.1397 and the earlier price action, Trader reaction to the 50% level at 1.1401 will determine the near-term direction of the market.

A sustained move over 1.1401 will indicate the presence of buyers. This could trigger a rally into a pair of uptrending angles at 1.1432 and 1.1458. Crossing to the strong side of the angle at 1.1458 will put the Euro in a bullish position with 1.1489 the next target.

A sustained move under 1.1401 will signal the presence of sellers. This could lead to a quick break into 1.1380 to 1.1372.

Look for an acceleration to the downside if 1.1372 fails as support. The chart indicates there is room to plunge into 1.1312 to 1.1304 over the near-term.

Basically, look for a bullish tone over 1.1401 and a bearish tone under 1.1372.