The Euro is trading lower against the U.S. Dollar on Friday shortly after the U.S. opening. The catalyst behind the early selling pressure was the U.S. Federal Reserve’s decision to leave interest rates unchanged while signaling it was going to continue raising rates gradually in an effort to slow inflation while allowing the economy to grow.
At 1218 GMT, the EUR/USD is trading 1.1350, down 0.0015 or -0.14%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1301 will signal a resumption of the downtrend with a Fibonacci level at 1.1185 the next major target. The main trend will change to up on a trade through 1.1501.
The minor trend is also down. It turned down on Thursday when sellers took out the minor bottom at 1.1355.
The longer-term range is 1.0339 to 1.2555. Currently, the EUR/USD is trading inside its retracement zone at 1.1447 to 1.1185.
Daily Swing Chart Technical Forecast
Based on the early trade, the direction of the EUR/USD is likely to be determined by trader reaction to yesterday’s close at 1.1364.
A sustained move under 1.1364 will indicate the presence of sellers. If the downside momentum continues then look for a drive into the October 31 main bottom at 1.1302 and the August 15 bottom at 1.1301.
The daily chart indicates the EUR/USD is vulnerable to further weakness if 1.1301 fails as support with the long-term Fibonacci level at 1.1185 the next major target.
Overtaking and sustaining a rally over 1.1364 will signal the presence of counter-trend buyers. They are going to try to form a secondary higher bottom. A close above this level will produce a closing price reversal bottom. This could lead to a 2 to 3 day counter-trend retracement.
This article was originally posted on FX Empire
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