EUR/USD Forex Technical Analysis – Strengthens Over 1.1447, Breakouts Over 1.1501
The Euro finished higher against the U.S. Dollar on Friday as a decline in U.S. Treasury yields continued to make the greenback a less-attractive investment. Additionally, the dollar has been pressured in recent weeks by rising expectations that the Federal Reserve will pause its tightening cycle sooner than expected, or risk extinguishing the strength in the U.S. economy with further interest rate hikes.
On Friday, the EUR/USD settled at 1.1442, up 0.0009 or +-.08%.
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Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1486 will signal a resumption of the uptrend. This should drive the EUR/USD into the November 7 main top at 1.1501.
Last week, a new secondary higher bottom was formed at 1.1343. This is a sign that the buying is strengthening. A trade through this bottom will change the main trend to down.
The major long-term retracement zone is 1.1447 to 1.1185. The market has been trading inside this zone for nearly two months. Clearly, this zone is controlling the longer-term direction of the EUR/USD.
The main range is 1.1501 to 1.1216. Its retracement zone at 1.1392 to 1.1359 is controlling the short-term direction of the EUR/USD. This zone is new support.
Daily Swing Chart Technical Forecast
Based on Friday’s price action and the close at 1.1442, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the major 50% level at 1.1447.
Bullish Scenario
A sustained move over 1.1447 will indicate the presence of buyers. If this can create enough upside momentum then look for the rally to possibly extend into the main top at 1.1486, followed by the next main top at 1.1501. The EUR/USD should run higher once 1.1501 is taken out.
Bearish Scenario
A sustained move under 1.1447 will signal the presence of sellers. The daily chart indicates that if this move can pick up any traction, we could see a pullback into 1.1392.