EUR/USD Mid-Session Technical Analysis for June 28, 2017
The EUR/USD surged to a one-year high early Wednesday before profit-taking and position-squaring fueled some intraday weakness. The sell-off may have been a reaction to comments from the European Central Bank which said the markets may have misinterpreted ECB President Mario Draghi’s comments on Tuesday, setting up a strong rally.
Technical Analysis
The main trend is up according to the daily swing chart. The trend will change to down on a move through 1.1118. However, the current price action suggests the market may be ripe for a potentially bearish closing price reversal top.
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Earlier today, the EUR/USD took out the August 18, 2016 top at 1.1366, before stopping at 1.1388, well short of the June 24, 2016 top at 1.1426.
The new short-term range is 1.1118 to 1.1388. Its retracement zone at 1.1253 to 1.1221 is the primary downside target.
Forecast
Based on the current price at 1.1335 and the earlier price action, the direction of the EUR/USD will be determined by trader reaction to the uptrending angle at 1.1358.
A sustained move over 1.1358 will signal the return of buyers. This could generate the momentum needed to challenge the next major top at 1.1426.
A sustained move under 1.1358 will indicate the selling is greater than the buying. The daily chart is wide open to the downside under this angle with the next targets coming in at 1.1253 and 1.1238.
Watch the price action and read the order flow at 1.1358 the rest of the session because there is room to fall. Look for further weakness today as long as the EUR/USD remains under this angle.