EUR/USD Mid-Session Technical Analysis for September 12, 2017

The EUR/USD is trading slightly better after yesterday’s steep sell-off. On Monday, the U.S. Dollar posted a strong rebound rally after Hurricane Irma was downgraded without causing as much damage as feared.

Traders are also watching Treasury yields. On Monday, 10-year U.S. Treasury yields rose 8 basis points to 2.125 percent, their biggest daily gain in nearly two months. We may have also seen position-squaring ahead of Thursday’s U.S. inflation report.

Technical Analysis

The main trend is up according to the daily swing. However, momentum has shifted to the downside.

A trade through 1.2092 will signal a resumption of the uptrend with 1.2166 the next likely upside target. A trade through 1.1823 will change the main trend to down.

The main range is 1.1823 to 1.2092. Its retracement zone is 1.1958 to 1.1926. This zone is currently being tested. Since the main trend is up then we could see a technical bounce on a test of this zone.

Buyers are going to try to form a potentially bullish secondary higher bottom. Sellers are trying to drive the market through this zone.

Forecast

Based on the current price at 1.1936 and the earlier price action, the tone of the market today will be determined by trader reaction to the retracement zone.

The current downside momentum suggests sellers are going after the Fibonacci level at 1.1926. Taking out this level could trigger an extension of the selling into the uptrending angle at 1.1903. This angle is the trigger point for an acceleration into the next uptrending angle at 1.1863.

Holding 1.1926 and overcoming the 50% level at 1.1958 will signal the presence of buyer. This could drive the market into an uptrending angle at 1.1983, Overcoming this angle could drive the EUR/USD into the next downtrending angle 1.2012.

Watch the price action and read the order flow at 1.1926. This will tell us if the bulls or bears are in control.