EUR/USD Mid-Session Technical Analysis for September 28, 2016
The EUR/USD is trading flat at the mid-session. However, it is recovering from early session weakness. The market seems to be in a holding pattern as investors await today’s U.S. Durable Goods data and speeches by several FOMC members including Fed Chair Janet Yellen. Since the Euro is a funding currency, the weaker U.S. equity markets may also be helping to provide support.
The market continues to remain rangebound no matter how you slice it. It’s been this way since the Brexit vote and likely to remain in a range until the U.K. formally makes its request to live the European Union or until it actually leaves the EU.
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TECHNICAL ANALYSIS
From the top, down, the main trend is down according to the daily swing chart. The trend will turn up on a trade through 1.1426. A move through 1.0910 will signal a resumption of the downtrend.
The minor trend is also down. It will change to up on a trade through 1.1327. A move through 1.1122 will reaffirm the downtrend.
The main range is 1.1426 to 1.0910. Its 50% level is 1.1168. The short-term range is 1.0951 to 1.1366. Its retracement zone is 1.1159 to 1.1110.
The combination of the two 50% levels makes 1.1168 to 1.1159 the key area to watch. Holding over this area suggests an upside bias.
The short-term range is 1.1327 to 1.1122. Its retracement zone at 1.1224 to 1.1249 is providing resistance. Trader reaction to this zone will determine the direction of the market the rest of the week.
FORECAST
BASED ON THE CURRENT PRICE AT 1.1218 AND THE EARLIER PRICE ACTION, LOOK FOR THE INTRADAY UPSIDE BIAS TO CONTINUE IF BUYERS CAN TAKE OUT 1.1224. THIS IS LIKELY TO LEAD TO A FAST RALLY INTO A CLUSTER OF NUMBERS AT 1.1249, 1.1250 AND 1.1256.
THE INABILITY TO TAKE OUT 1.1224 WILL INDICATE THE PRESENCE OF SELLERS. THIS COULD DRIVE THE MARKET INTO THE NEXT SUPPORT ANGLE AT 1.1186. BREAKING THIS ANGLE COULD LEAD TO A TEST OF THE TWO KEY 50% LEVELS AT 1.1168 AND 1.1159.
LONGER-TERM TRADERS SHOULD NOTE THAT THE EUR/USD IS TRADING INSIDE AN UPTRENDING CHANNEL. THEREFORE, TAKING OUT THE UPPER LEVEL OF THE CHANNEL AT 1.1250 WILL GIVE THE MARKET A STRONG UPSIDE BIAS.
TAKING OUT THE LOWER LEVEL OF THE CHANNEL AT 1.1186 WILL GIVE THE EUR/USD A STRONG DOWNSIDE BIAS.