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

The EUR/USD is trading higher shortly before the U.S. opening. The Forex pair is also trading inside Friday’s range which indicates investor indecision and impending volatility.

There has been no follow-through to the downside after last week’s steep sell-off. We may be looking at position-squaring ahead of Wednesday’s Federal Reserve meeting. Also the situation in Catalonia seems to have calmed down.

We could see volatility return later in the session if the Mueller investigation leads to the arrest of individuals close to President Donald Trump. The U.S. Dollar could plunge, fueling a strong short-covering rally by the Euro.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The EUR/USD is not in a position to change the main trend to up, but we could see a short-covering rally, because of the Forex pair’s attraction to a major retracement zone.

The main range is 1.1312 to 1.2092. Its retracement zone at 1.1702 to 1.1610 is currently being tested. Trader reaction to this zone will determine the near-term direction of the EUR/USD.

Daily Forecast

Based on the current price at 1.1636 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the Fibonacci level at 1.1610.

A sustained move over 1.1610 will indicate the presence of buyers. If this creates enough upside momentum then we could see a rally into the 50% level at 1.1702. Since the main trend is down, we could see sellers come in on a test of this level.

A sustained move under 1.1610 will signal the presence of sellers. This could lead to a resumption of the selling pressure with the next target angle coming in at 1.1520.

Watch the price action and read the order flow at 1.1610 all session. Trader reaction to this level will tell us if the buyers have returned or if the sellers are retaking control.