The Euro is trading slightly better against the U.S. Dollar on Monday on some light profit-taking after last week’s steep plunge was fueled by dovish reports on European Central Bank (ECB) policy. Although an interest rate cut by the ECB has been priced into the Euro for over a month, traders now believe the central bank could restart its quantitative easing program and was open to extending it into equity purchases.
At 12:55 GMT, the EUR/USD is trading 1.1100, up 0.0010 or +0.08%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1027 will reaffirm the downtrend. The main trend will change to up on a trade through 1.1250.
The minor trend is also down. A new minor bottom has formed at 1.1066. A trade through this level will signal a resumption of the downtrend.
The short-term range is 1.1027 to 1.1250. Its retracement zone at 1.1139 to 1.1112 is controlling the momentum. Overcoming this zone could shift short-term momentum to the upside.
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 short-term Fibonacci level at 1.1112.
A sustained move under 1.1112 will indicate the presence of sellers. The first downside target is the uptrending Gann angle at 1.1087. Taking out this level could trigger a break into the minor bottom at 1.1066. This will lead to a test of the next uptrending Gann angle at 1.1057. This is a potential trigger point for an acceleration to the downside with the next target the main bottom at 1.1027.
Crossing to the bearish side of a downtrending Gann angle at 1.1070 will also put the EUR/USD in a weak position.
A sustained move over 1.1112 will signal the presence of buyers. This could trigger an acceleration to the upside with the next target the 50% level at 1.1139. Overcoming this angle could lead to a further rally into the downtrending Gann angle at 1.1160.
This article was originally posted on FX Empire
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