EUR/USD Mid-Session Technical Analysis for July 31, 2017

The EUR/USD is trading lower and inside Friday’s range. Friday’s range was inside Thursday’s range. Both inside moves indicate investor indecision and impending volatility. The European Central Bank and U.S. Federal Reserve will not meet until September so investors will have to rely on economic date for their trading decisions.

Any U.S. data which indicates lower inflation or a weakening economy will be bullish for the Euro.

Earlier today, German Retail Sales beat expectations, Euro Zone CPI Flash Estimate was 1.3% as expected, Euro Zone Core CPI Flash Estimate was 1.2% and the Euro Zone Unemployment Rate was lower at 9.1%.

Later today, investors will get the opportunity to react to the latest Chicago PMI data and Pending Home Sales.

Technical Analysis

The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top suggests momentum may be slowing.

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

A move through 1.1649 will confirm the closing price reversal top. This could trigger a 2 to 3 day correction.

Minor support are the old tops at 1.1712 and 1.1616.

The main range is 1.1312 to 1.1776. A confirmation of the reversal top could lead to a test of its 50% level or pivot at 1.1544.

Forecast

Based on the current price at 1.1730, the first minor support is 1.1712. This is followed by a pair of Gann angles at 1.1698 and 1.1672.

Look for an acceleration to the downside if 1.1672 fails as support. This could trigger a move into 1.1616, followed by 1.1544.