EUR/USD Mid-Session Technical Analysis for October 17, 2017

    last monthByJames Hyerczyk

    Sellers continued to dominate the EUR/USD on Tuesday, driving the Forex pair into its lowest level since October 10. Rising U.S. Treasury yields helped make the U.S. Dollar a more attractive investment. Meanwhile, Ten-year bond yields in Germany hit a one-month low, extending moves seen late last week on reports.

    German Bund yields fell because the European Central Bank is now considered less hawkish than the market had initially thought last month, pushing German bund yields lower and in turn favoring the dollar against the Euro.

    Additionally, Treasury yields rebounded from two-week lows after a report that President Trump was favoring Stanford economist John Taylor, seen as more hawkish than current Chair Janet Yellen, to head the Fed. A stronger-than-expected New York Fed Empire Start report also helped underpin the EUR/USD.

    Daily EURUSD

    Daily Technical Analysis

    The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A trade through 1.1668 will change the main trend to down. The uptrend will resume on a move through 1.1879.

    The main range is 1.2033 to 1.1668. Its retracement zone at 1.1850 to 1.1894 helped stop the rally last week at 1.1879.

    The short-term range is 1.1668 to 1.1879. Its retracement zone and primary downside target at 1.1773 to 1.1749 is currently being tested.

    Since the main trend is up according to the daily swing chart, we could see buyers show up on a test of 1.1773 to 1.1749. They are going to try to form a potentially bullish secondary higher bottom. Aggressive sellers are going to try to drive the market through this zone with the next targets a major 50% level at 1.1695 and 1.1668.

    Daily Forecast

    Based on the current price at 1.1759 and the earlier price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1749.

    A sustained move over 1.1749 will signal the presence of buyers with the first target a 50% level at 1.1773. Overtaking this level could trigger an acceleration into 1.1819.

    A sustained move under 1.1749 will indicate the presence of sellers. This is followed closely by an uptrending angle at 1.1849. We could see a technical bounce on the first test of this angle.

    Taking out 1.1849 will indicate the selling is getting stronger with the next target angle coming in at 1.1703.

    Looking at the broader picture, watch for an upside bias to develop on a sustained move over 1.1773 and a downside bias on a sustained move under 1.1749.


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