EUR/USD Mid-Session Technical Analysis for May 25, 2017

The EUR/USD is trading lower at the mid-session after giving up its earlier gains. The Euro moved higher shortly after the opening as investors continued to focus on U.S. monetary policy, as they digested the release of the minutes of the U.S. Federal Reserve’s meeting in early May.

Today’s turnaround in the EUR/USD may be related to volatility from rumors that OPEC reportedly announced it would extend cuts in oil by nine months to March 2018. This news could be causing volatility and perhaps supporting the U.S. Dollar.

German and France are on holiday today, but investors will get the opportunity to react to the latest U.S. news on weekly unemployment claims, Goods Trade Balance and Preliminary Wholesale Inventories. FOMC Member Lael Brainard is also scheduled to speak.

Technical Analysis

The main trend is up according to the daily swing chart, but momentum may be getting ready to shift to the downside with the formation of the potentially bearish closing price reversal top at 1.1268 on May 23 and the subsequent confirmation on Wednesday.

A trade through 1.1268 will negate the chart pattern and signal a resumption of the uptrend with the November 9, 2016 main top at 1.1299 the first target, followed by the September 8, 2016 main top at 1.1327.

A move through 1.1168 will change the minor trend to down.

The short-term range is 1.0839 to 1.1268. If the selling pressure continues then its retracement zone at 1.1054 to 1.1003 will become the primary downside target.

 Forecast

Based on the current price at 1.1210 and the earlier price action, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to an uptrending angle at 1.1239 and a downtrending angle at 1.1209.

A sustained break under 1.1209 will indicate the presence of sellers. This could lead to a fast move into the minor bottom at 1.1168 and the next downtrending angle at 1.1124. If this angle fails then look for a test of the first primary target level at 1.1054.

Holding above 1.1209 will signal the presence of buyers. This could drive the EUR/USD back into the steep uptrending angle at 1.1239.

Overtaking 1.1239 will indicate the presence of buyers. This could generate enough upside momentum to drive the market back to 1.1268 then 1.1299 and 1.1327.

Basically, look for a downside bias to develop on a sustained move under 1.1209 and an upside bias on a sustained move over 1.1239.