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

The EUR/USD is trading lower shortly before the release of the European Central Bank interest rate decision and monetary policy decision. Investors will be looking for clues from the ECB on tapering of its stimulus.

Traders are hoping the central bank lays out the groundwork for a fall shift, emphasizing improved growth while trying to temper expectations after previously setting off a short-term volatile reaction in the financial markets about three weeks ago.

A rate hike today is not completely out of the question, but investors feel if it did happen the Euro could end up lower for the session because the next rate increase has already been priced into the market.

Technical Analysis

The main trend is up according to the daily swing chart, but the price action the last two sessions suggests investors have been cutting positions ahead of the ECB announcement. A trade through 1.1583 will signal a resumption of the uptrend. This could trigger a further rally into the May 3, 2016 main top at 1.1616.

The short-term range is 1.1312 to 1.1583. Its retracement zone at 1.1447 to 1.1416 is the primary downside target. An uptrending angle at 1.1422 also passes through this zone, making it a valid downside target. Since the main trend is up, buyers could come in on a test of this area.

The main range is 1.1118 to 1.1583. Its retracement zone at 1.1350 to 1.1296 is also a major downside target. An uptrending angle also passes through this zone at 1.1338. A break into this area will probably encourage aggressive buying.

Forecast

Based on the current price at 1.1484, the nearest upside targets are a pair of uptrending angles at 1.1532 and 1.1558. Crossing to the strong side of these angles will put the EUR/USD in a strong position. This could lead to a test into 1.1583 then 1.1616.

If the selling pressure continues then look for a drive into 1.1447, followed by 1.1422 then 1.1416. The latter is the trigger point for an acceleration into 1.1350 and 1.1338.