EUR/USD Mid-Session Technical Analysis for September 4, 2017

The EUR/USD is trading higher in limited price action on Monday. U.S. banks are on a bank holiday so volume is expected to be well-below average. However, volatility could go either way because of the thin-trading conditions.

Traders are showing a limited reaction to the North Korean nuclear weapons test over the week-end as they prepare for Thursday’s European Central Bank monetary policy decision and ECB President Mario Draghi’s press conference.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of the daily closing price reversal top at 1.2070 on August 29. A trade through this level will negate the chart pattern and signal a change in trend to up.

Taking out 1.1822 will turn the minor trend to down. This will put the market on course for a potential test of the main bottom at 1.1661. A trade through this level will change the main trend to down.

The main range is 1.1661 to 1.2070. Its retracement zone at 1.1866 to 1.1817 is support. This zone stopped the price slide late last week at 1.1822.

The short-term range is 1.2070 to 1.1822. Its retracement zone at 1.1946 to 1.1975 is the primary upside target. This zone stopped the rally on Friday.

Forecast

Based on the current price at 1.1900 and the earlier price action, the direction of the market today is likely to be determined by a pair of Gann angles at 1.1901 and 1.1910.

A sustained move over 1.1910 will indicate the presence of buyers. This could drive the market into 1.1946, followed by 1.1975 and 1.1990.

A sustained move under 1.1901 will signal the presence of sellers. The next target comes in at 1.1866. Look for an acceleration to the downside under this level with 1.1822 and 1.1817 the next likely downside target.