EUR/USD Mid-Session Technical Analysis for July 6, 2017

The EUR/USD is trading higher shortly before the release of the European Central Bank Monetary Policy Meeting Accounts. The price action suggests investors are hoping the minutes throw some light on the ECB’s internal discussions over the timing of the exit from its stimulus measures.

Last week, ECB President Mario Draghi hinted at phasing out of the central bank’s stimulus measures while driving the Euro to its highest level of the year.

Investors will be looking for any discussions on further tweaks to the ECB’s forward guidance and possible QE exit strategies in the June minutes.

Technical Analysis

The main trend is up according to the daily swing chart. Today’s price action has made 1.1312 a new minor bottom. A trade through 1.1445 will signal a resumption of the uptrend.

The main range is 1.1118 to 1.1445. Dovish ECB minutes could trigger a break through 1.1312, putting the EUR/USD in a position to challenge the main retracement zone at 1.1282 to 1.1243.

The new short-term range is 1.1445 to 1.1312. If today’s upside momentum continues then look for the rally to extend into its retracement zone at 1.1379 to 1.1394.

This retracement zone is very important because bearish traders are going to try to set up a secondary lower top on a test of this area. Bullish traders are going to try to take it out in an effort to form a new main bottom at 1.1312.

Forecast

Based on the current price at 1.1370, the EUR/USD is in a position to challenge the 50% level at 1.1379. This is followed by a resistance cluster at 1.1394 to 1.1395. This zone is resistance and a trigger point for an acceleration into the next downtrending angle at 1.1420. This is the last potential resistance angle before the 1.1445 main top.

The inability to overcome 1.1379 will signal the presence of sellers. Crossing to the weak side of the uptrending angle at 1.1358 will indicate the selling is getting stronger. This could drive the market into the downtrending angle at 1.1345.

If the Euro crosses below 1.1345 then look for the selling to extend into 1.1312. This is the last support before the main 50% level at 1.1282.