The EUR/USD is trading lower at the mid-session as investors react to another threat by North Korea. Investors are moving money out of the U.S. Dollar in
The EUR/USD is trading lower at the mid-session as investors react to another threat by North Korea. Investors are moving money out of the U.S. Dollar in response to a reported threat by North Korea to test a nuclear bomb in the Pacific Ocean.
The main trend is up according to the daily swing chart. However, momentum shifted to the downside with the formation of a potentially bearish closing price reversal top on September 20.
A trade through 1.2033 will negate the chart pattern and signal a resumption of the uptrend. If this generates enough upside momentum, we could see a move into the main top at 1.2092.
The main trend will change to down on a move through 1.1837. This is followed closely by another main bottom at 1.1837.
The short-term range is 1.2092 to 1.1837. Its retracement zone at 1.1965 to 1.1995 is currently being tested. Buyers are either going to come in to take out this zone, or enough selling pressure will take place to form a potentially bearish secondary lower top.
Based on the current price at 1.1965 and the earlier price action, the direction of the EUR/USD the rest of the session will be determined by trader reaction to the Fibonacci level at 1.1995 and the uptrending angle at 1.1957.
Taking out 1.1995 and sustaining the rally will signal the presence of buyers. This could drive the EUR/USD into 1.2033 then a downtrending angle at 1.2042.
A sustained move under 1.1957 will signal the presence of sellers. The daily chart is wide open to the downside under this angle with the next target angle coming in at 1.1897.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.