EUR/USD Mid-Session Technical Analysis for July 3, 2017

Profit-taking and positon-squaring ahead of Tuesday’s U.S. Fourth of July bank holiday is pressuring the EUR/USD on Monday. Traders are also reacting to disappointing European PMI while looking forward to fresh U.S. economic data which includes Final Manufacturing PMI, ISM Manufacturing PMI, Construction Spending, ISM Manufacturing Prices and Total Vehicle Sales.

In Europe, Spanish and Italian Manufacturing PMI came in below expectations. French Final Manufacturing PMI also missed. German Final Manufacturing PMI was only slightly better as well as Final Manufacturing PMI.

In the U.S., the key report is ISM Manufacturing PMI. It is expected to come in at 55.0 versus 54.9 previously.

Technical Analysis

The main trend is up according to the daily swing chart. However, today’s lower-low has produced a new minor top at 1.1445.

The EUR/USD is currently trading inside a pair of former tops at 1.1366 and 1.1426.

The main range is 1.1118 to 1.1445. If the selling continues then its retracement zone at 1.1281 to 1.1243 will become the primary downside target.

Forecast

Based on the current price at 1.1368, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the former top at 1.1366.

Holding 1.1366 will indicate the presence of buyers. If momentum returns, then 1.1426 becomes the next target, followed by last week’s high at 1.1445.

A sustained move under 1.1366 will signal the presence of sellers. The daily chart is wide open to the downside with the next major target angle coming in at 1.1298, followed by the 50% level at 1.1281.

Watch the price action and read the order flow at 1.1366. Trader reaction to this price will tell us if the buyers have returned, or if sellers are increasing pressure.