EUR/USD Mid-Session Technical Analysis for August 18, 2017
The EUR/USD is bouncing back a little at the mid-session on Friday. There was no follow-through to the downside following yesterday’s tumultuous trading session. The Forex pair is trading inside yesterday’s range. This suggests investor indecision and impending volatility. Keep an eye on the volatility because I believe it’s here to stay if when the major players return from summer vacation.
Technical Analysis
The main trend is down according to the daily swing chart. The trend will turn up on a trade through 1.1847. The downtrend will resume on a move through 1.1661.
Your capital is at risk
The short-term range is 1.1910 to 1.1661. Its retracement zone at 1.1786 to 1.1815 is the primary upside target. Since the main trend is down, sellers are likely to show up on a test of this zone. A pair of downtrending angles passes through this zone at 1.1790 and 1.1797, making them valid upside targets also.
The main retracement zone is 1.1611 to 1.1540. This is the primary downside target. An uptrending angle passes through this zone at 1.1548, making it a valid downside target also.
Forecast
Based on the current price at 1.1739 and the earlier price action, the direction of the EUR/USD is likely to be determined by trader reaction to the downtrending angle at 1.1747.
A sustained move over 1.1747 will indicate the presence of buyers. This could create enough upside momentum to challenge a cluster of potential resistance points at 1.1786, 1.1790 and 1.1797.
If these levels can’t stop the rally then it could extend into the Fibonacci level at 1.1815, followed by the main top at 1.1847 and the downtrending angle at 1.1850.
A sustained move under 1.1747 will signal the presence of sellers. This could lead to a steep drop into the next downtrending angle at 1.1670, followed by yesterday’s low at 1.1661 and a long-term uptrending angle at 1.1633.
Watch the price action and read the order flow at 1.1747 all session. This should tell us if the buying is getting stronger, or if sellers are still in control.