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EUR/USD Mid-Session Technical Analysis for May 22, 2017

By:
James Hyerczyk
Updated: May 22, 2017, 11:59 UTC

The EUR/USD is trading higher at the mid-session. This is a continuation of last week’s rally and Friday’s strong close. There are no major economic

EUR/USD

The EUR/USD is trading higher at the mid-session. This is a continuation of last week’s rally and Friday’s strong close.

There are no major economic reports today, but investors will get the opportunity to react to several Federal Reserve policymakers who are scheduled to speak. Traders will be listening for comments about the June rate hike and the number of expected rate hikes later in the year.

According to the CME Group’s FedWatch Tool, futures traders are pricing in about a 3 in 4 chance of a June rate hike, but only about a 40 percent chance of two or more rate hikes in 2017.

According to the latest data from the Commodity Futures Trading Commission, released on Friday, net long positioning on the Euro rose to its highest in more than three years in the week-ended May 16.

The current price action suggests that investors are raising bets the European Central Bank will shift to a more dovish tone at its next monetary policy meeting next month. It also suggests that investors feel that Europe is emerging as a bright spot in the global economy.

EURUSD
Daily EUR/USD

Technical Analysis

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

The current upside target is the November 9, 2016 main bottom at 1.1299.

Forecast

Based on the current price at 1.1237 and the earlier price action, the direction of the market the rest of the session will be determined by trader reaction to the long-term downtrending angle at 1.1212.

A sustained move over 1.1212 will signal that the buying is getting stronger. This will keep it on its path towards the 1.1299 main top.

A sustained move under 1.1212 will indicate the presence of sellers. If the selling volume continues then we could see a possible break into the support cluster at 1.1127 to 1.1119.

Watch the price action and read the order flow at 1.1212 today. Trader reaction to this level will tell us if the buying is getting stronger or if sellers are retaking control.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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