EUR/USD Mid-Session Technical Analysis for October 20, 2017

The EUR/USD is trading lower at the mid-session. The Euro posted a wicked two-sided trade, but remained inside yesterday’s range. This indicates investor indecision and impending volatility.

Supporting the U.S. Dollar is the passing of the U.S. budget which paves the way for tax reform. Pressuring the dollar is President Trump’s possible appointment of a less-hawkish Fed Chair. Earlier in the week, rising Treasury yields pushed up the Greenback as speculators bet Trump would choose a hawkish Fed Chair to replace current Fed Chair Janet Yellen.

Euro traders were also reacting to events in Spain while adjusting position ahead of next week’s important European Central Bank monetary policy decision.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1879 will signal a resumption of the uptrend. If this move gains traction then the next likely target is the September 20 main top at 1.2033.

A trade through 1.1729 will change the main trend to down with 1.1668 the next likely target.

The main range is 1.2033 to 1.1668. Its retracement zone at 1.1850 to 1.1894 is the primary upside target. This zone is essentially controlling the near-term direction of the EUR/USD. It stopped a rally at 1.1879 on October 12. Its 50% level at 1.1850 provided resistance on Thursday and earlier today.

On the downside, potential support zones come in at 1.1822 to 1.1804 and 1.1773 to 1.1749.

Daily Forecast

Based on the current price at 1.1816 and the earlier price action, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the short-term retracement zone at 1.1822 to 1.1804.

A sustained move over 1.1822 will indicate the presence of buyers. This could trigger a rally into the major 50% level at 1.1850. This level is the trigger point for an acceleration to the upside with the next target the Fibonacci level at 1.1894.

A sustained move under 1.1804 will signal the presence of sellers. This could trigger an acceleration to the downside with the first target the intermediate 50% level at 1.1773, followed by the intermediate Fibonacci level at 1.1749.