EUR/USD Mid-Session Technical Analysis for June 23

The EUR/USD is trading higher shortly before the start of the U.S. trading session. The move is being fueled by a weaker U.S. Dollar, which touched a four-day low against a basket of currencies on Friday. The Euro was also supported by a slew of stronger-than-expected economic data.

Traders reacted to strong Flash Manufacturing PMI data in France, Germany and the Euro Zone. Later today, investors will get the opportunity to react to Flash Manufacturing PMI date from the United States.

Falling U.S. Treasury yields are also contributing to the weakness in the U.S. Dollar. Investors are worried that this week’s sell-off in crude oil will lower inflation enough for the Fed to scrap its plans to hike interest rates later in the year.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1118 will signal a resumption of the downtrend. A move through 1.1295 will change the main trend to up.

The main range is 1.0839 to 1.1295. If 1.1118 fails as support then look for the selling to extend into the retracement zone at 1.1067 to 1.1013.

The short-term range is 1.1295 to 1.1118. If the rally continues today then its retracement zone at 1.1206 to 1.1227 will become the primary upside target.

Forecast

Based on the current price at 1.1166, the direction of the EUR/USD the rest of the session will be determined by trader reaction to a pair or angles at 1.1155 and 1.1149.

A sustained move over 1.1155 will indicate the presence of buyers. This could create the upside momentum needed to generate a rally into the short-term 50% level at 1.1206. This is followed by a resistance cluster at 1.1225 to 1.1227.

A sustained move under 1.1149 will signal the presence of sellers. This could trigger a break into the main bottom at 1.1118. If it fails then look for the selling to extend into the major 50% level at 1.1067.