EUR/USD Mid-Session Technical Analysis for July 28, 2017

The EUR/USD is trading higher on Friday, shortly ahead of the release of the U.S. Quarterly Advance GDP report. It is expected to show the economy grew 2.5% last quarter, better than the previous 1.4%.

Matching the forecast is likely to be supportive for the U.S. Dollar. Beating the estimate should lead to a sell-off. A lower-than-expected result should give the EUR/USD a boost.

The report will be released at 1230 GMT. It will be followed by the U.S. Employment Cost Index. This report is expected to come in at 0.6%, down from the previous 0.8%. A higher number will pressure the EUR/USD because this news will indicate a little boost in inflation.

Finally, traders will also get the opportunity to react to the latest Revised University of Michigan Consumer Sentiment report. It is expected to come in flat at 93.2.

Technical Analysis

The main trend is up according to the daily swing chart. However, the upside momentum slowed with the formation of a closing price reversal top.

A trade through 1.1612 will confirm the potentially bearish chart pattern. This could lead to the start of a 2 to 3 day correction with the next major target the 50% level at 1.1544.

A trade through 1.1776 will negate the closing price reversal chart pattern and signal a resumption of the uptrend.

Forecast

Based on the current price at 1.1711 and the earlier price action, the direction of the EUR/USD will be determined by trader reaction to the uptrending angle at 1.1678.

Earlier today, the EUR/USD held a test of 1.1678. This helped generate a technical bounce. Overcoming the previous long-term top at 1.1712 will indicate the buying is getting stronger. This may generate the upside momentum needed to overcome 1.1776.

Breaking through 1.1678 will signal the presence of sellers. The next target is the short-term uptrending angle at 1.1652.

Look for an acceleration into 1.1616 if 1.1652 fails as support. The daily chart will open up to the downside under 1.1652 with 1.1544 the next major target.