EUR/USD Mid-Session Technical Analysis for September 8, 2017

The EUR/USD is trading higher on Friday. Traders are still reacting to European Central Bank President Mario Draghi’s comments on Thursday and the central bank’s decision to leave interest rates at current historically low levels.

On Thursday, the ECB kept rates at record lows and confirmed that asset purchases would continue at least until December. ECB President Mario Draghi also cited the strength of the Euro and said it was the main reason for a cut in the bank’s new 2018-19 inflation forecasts.

Draghi reiterated, however, that policymakers would decide on tapering this autumn, adding:  Probably the bulk of these decisions will be taken in October.”

Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous main top at 1.2070 earlier today.

If buyers can sustain the rally over 1.2070 then this may create enough upside momentum to challenge the next major 50% level at 1.2166.

Breaking back below 1.2070 after crossing it earlier will indicate the presence of sellers. If this continues to draw the attention of sellers throughout the session, we could see a potentially bearish closing price reversal top form. This chart pattern may not mean the trend is changing to down, but it could indicate that the selling is greater than the buying at current price levels.

Forecast

Based on the current price at 1.2065 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the steep uptrending angle at 1.2063.

A sustained move over 1.2063 will indicate the presence of buyers. Holding above this angle may create enough upside momentum to challenge the major 50% level at 1.2166.

A sustained move under 1.2063 will signal the presence of sellers. The daily chart is wide open to the downside so we could see an acceleration to the downside with the next target angle coming in at 1.1943.

Watch the price action and read the order flow at 1.2063 all day. Trader reaction to this angle will tell us if the buyers or sellers are in control.