EUR/USD Mid-Session Technical Analysis for September 13, 2017

The EUR/USD is trading higher shortly before the release of the U.S. Producer Price report. The PPI is expected to come in at 0.3%, up from the previous -0.1%. The Core PPI is expected to come in at 0.2%, up from last month’s -0.1%.

The producer inflation data is important because the Fed will use it when making next week’s interest rate decision. On Thursday, the U.S. will report on consumer inflation.

Technical Analysis

The main trend is up according to the daily swing chart. The Forex pair just completed a normal two-day correction so I wouldn’t say momentum has shifted to the downside.

A trade through 1.2092 will reaffirm the uptrend. A move through 1.1926 will change the minor trend to down. The main trend will change to down on a trade through 1.1823.

The main range is 1.1823 to 1.2092. Its retracement zone at 1.1958 to 1.1926 is the primary downside target. This zone and particularly the lower or Fibonacci level stopped the selling at 1.1926, leading to a strong short-covering rally.

The new short-term range is 1.2092 to 1.1926. Its retracement zone at 1.2009 to 1.2029 is the primary upside target. This zone is very important.

Aggressive counter-trend sellers are going to try to stop the rally in an effort to form a secondary lower top. Buyers are going to try to take out this zone in an effort to make 1.1926 a new main bottom.

Forecast

Based on the current price at 1.1980 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 downtrending angle at 1.1972.

A sustained move over 1.1972 will signal the presence of buyers. This could drive the EUR/USD into an uptrending angle at 1.2003, followed by a retracement zone at 1.2009 to 1.2029 and a downtrending angle at 1.2032.

A sustained move under 1.1972 will indicate the presence of sellers. This is followed by the retracement zone at 1.1958 to 1.1926. A failure at 1.1926 will indicate the selling is getting stronger with target angles at 1.1913 and 1.1868.

We’re likely to see a reaction to the PPI report at 1230 GMT, but gains and losses will be limited because of Thursday’s CPI report.