EUR/USD Mid-Session Technical Analysis for September 25, 2017

The EUR/USD opened sharply lower and continues to plunge. The single-currency is breaking hard in reaction to Germany’s election results which showed surging support for a far-right party that is going to force Chancellor Angela Merkel to form a governing coalition.

Later today, investors will get the opportunity to react to several Fed speakers including FOMC Members William Dudley, Charles Evans, and Neel Kashkari. Their speeches could cause volatility in the market especially if they talk about monetary policy and the timing of the next rate hike.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to down with the formation of the closing price reversal top at 1.2033 on September 20. A trade through 1.1860 will confirm the chart pattern and could trigger a further break into the main bottom at 1.1837.

A trade through 1.1837 will change the main trend to down. This could trigger a further break into the next main bottom at 1.1823. This is another trigger point for an acceleration into the next major bottom at 1.1661.

The main range is 1.1661 to 1.2092. Its retracement zone at 1.1877 to 1.1826 is currently being tested. Since the trend is up, we could see a technical bounce as buyers come in to defend the uptrend. If this zone fails as support then look for the selling pressure to increase.

The short-term range is 1.2092 to 1.1837. Its retracement zone at 1.1965 is new resistance.

Daily Forecast

Based on the current price at 1.1870, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to 1.1877.

A sustained move under 1.1877 will indicate the presence of sellers. This could trigger another sharp break into a cluster of numbers at 1.1837, 1.1826 and 1.1823. The latter is the followed by an uptrending angle at 1.1796.

A sustained move over 1.1877 will signal the presence of buyers. This could lead to a rally into the uptrending angle at 1.1907. The buying could strengthen over this angle with 1.1905 the next target.

Watch the price action at 1.1877 the best of the day. This price is controlling the direction of the EUR/USD at this time. Look for volatility today because of the Fed member speeches.