The Euro is trading slightly lower against the U.S. Dollar on Monday, while trading inside Friday’s wide trading range. The price action suggests investor indecision and impending volatility ahead of Tuesday’s speech by Federal Reserve Chairman Jerome Powell, which could offer clues as to the direction of U.S. interest rates.
At 11:48 GMT, the EUR/USD is trading 1.1217, down 0.0008 or -0.08%.
The single currency is showing little reaction to the mixed economic news released earlier in the session. The German Trade Balance came in better-than-expected at 18.7 Billion, but Sentix Investor Confidence came in at -5.8, well-below the 0.3 estimate.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at 1.1413 on June 25.
A trade through 1.1181 will change the main trend to down. This could trigger a further decline with the May 30 bottom at 1.1116 and the May 23 bottom at 1.1107, the next potential downside targets.
Due to the prolonged move down in terms of price and time (9 sessions), the EUR/USD is in the window of time for a closing price reversal bottom.
The next major Fibonacci support comes in at 1.1185. On the upside, retracement level resistance is layered at 1.1270, 1.1278 and 1.1297.
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at 1.1233.
A sustained move over 1.1233 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into a resistance cluster at 1.1268 to 1.1270.
A sustained move under 1.1233 will signal the presence of sellers. Taking out Friday’s low at 1.1207 will indicate the selling is getting stronger. This could trigger a break into the support cluster at 1.1188, 1.1185 and 1.1181.
Look for an acceleration to the downside if 1.1181 fails with 1.1147 the next likely downside target. This is the last major support before the 1.1116 and 1.1107 main bottoms.
This article was originally posted on FX Empire
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