EUR/USD Mid-Session Technical Analysis for December 1, 2016
The EUR/USD is trading slightly higher shortly after the European opening. Yesterday, the Euro traded lower against the dollar. However, there has been no follow-through to the downside.
Yesterday, the U.S. Dollar was driven higher by rising Treasury yields. However, weaker stock prices helped support the Euro because of the carry trade. This may also be helping to underpin the EUR/USD early today.
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If stocks continue to sell-off then we could see the EUR/USD trade higher today. We could also see a sideways to higher trade today ahead of Friday’s U.S. Non-Farm Payrolls report.
The main trend is up according to the daily swing chart. It turned up on Monday when the EUR/USD took out the previous main top at 1.0657. However, there was very little follow-through to the upside with the rally stopping at 1.0685.
The short-term range is 1.0517 to 1.0685. Its retracement zone is 1.0601 to 1.0581. The market is currently straddling this zone. If it holds as support then we could see a rally later today.
The main range is 1.1299 to 1.0517. If there is a breakout to the upside then look for a possible test of 1.0908 to 1.1000 over the near-term.
Based on the current price at 1.0612, the direction of the EUR/USD will likely be determined by trader reaction to the short-term 50% level at 1.0601.
A sustained move over 1.0601 will signal the presence of buyers. Overtaking the downtrending angle at 1.0617 will indicate the buying is getting stronger. This could drive the market into the major downtrending angle at 1.0659.
Overtaking 1.0659 could generate enough upside momentum to challenge the high at 1.0685. This price is the trigger point for an acceleration to the upside.
A sustained move under 1.0601 will indicate the presence of sellers. This could lead to a labored break into a series of levels at 1.0581, 1.0567 and 1.0542. The latter is the last potential support angle before the 1.0517 main bottom.
Watch the price action and read the order flow at 1.0601 today. Trader reaction to this level will tell us if the buying is getting stronger, or if the sellers are regaining control.