EUR/USD Mid-Session Technical Analysis for June 30, 2017

The EUR/USD is trading lower as investors take a breather after reaching trading levels not seen in a year this week. Hawkish talk on Tuesday by European Central Bank President Mario Draghi is behind the rally. Traders interpreted his comments to mean the ECB would soon begin reducing stimulus, putting it in a positon to perhaps raise interest rates sooner than expected.

Technical Analysis

The main trend is up according to the daily swing chart. However, today is the eighth day up from the recent bottom, putting the EUR/USD in the window of time for a potentially bearish closing price reversal top.

A trade through 1.1445 will signal a resumption of the uptrend. There is no resistance until the May 3, 2016 main top at 1.1616.

The Euro is currently straddling the June 24, 2016 top at 1.1426. This price could act like a pivot today.  This price is followed by the August 8, 2016 main top at 1.1366. This price could become support because “old tops tend to become new bottoms”.

The new main range is 1.1118 to 1.1445. If the EUR/USD starts to sell-off then its retracement zone at 1.1282 to 1.1243 will become the primary downside target.

Forecast

Based on the current price at 1.1408 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the steep uptrending angle at 1.1438.

A sustained move over 1.1438 will indicate the presence of buyers. The first target is yesterday’s high at 1.1445. Overtaking this level could trigger the start of an acceleration to the upside.

A sustained move under 1.1445 will signal the presence of sellers. Crossing to the weak side of 1.1426 will indicate the selling is getting stronger. This is followed by 1.1366.

Taking out 1.1366 could trigger an acceleration to the downside. The daily chart is wide open under this level with the next target a support cluster at 1.1282 to 1.1278.

Basically, look for a weak tone under 1.1438 and for an upside bias to begin over this price.