An easing of tensions over U.S.-China trade relations is helping to pressure the Euro on Tuesday. Treasury yields are up, making the U.S. Dollar a more attractive investment, while bargain-hunters are helping to drive up demand for higher risk assets. The lack of fresh economic news from the U.S. and Euro Zone has shifted the focus to the trade deal.
At 13:03 GMT, the EUR/USD is trading 1.1214, down 0.0011 or -0.10%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1265 will change the main trend to up. Yesterday’s closing price reversal top at 1.1264 and today’s confirmation of the chart pattern, shifted momentum to the downside.
The main range is 1.1448 to 1.1112. Its retracement zone at 1.1280 to 1.1320 is resistance.
The short-term range is 1.1324 to 1.1112. Its retracement zone is 1.1218 to 1.1243. The market is currently straddling this zone. If prices continue to weaken then this zone will turn into resistance.
The major support is the long-term Fibonacci level at 1.1185.
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the 50% level at 1.1218.
A sustained move over 1.1218 will indicate the presence of buyers. However, due to the number of potential resistance levels, we’re looking for a labored move.
The first upside target angle comes in at 1.1232, followed by a Fib level at 1.1243, a downtrending Gann angle at 1.1253, reversal tops at 1.1264 and 1.1265, another downtrending Gann angle at 1.1269 and a 50% level at 1.1280.
The trigger point for an acceleration to the upside is 1.1280.
A sustained move under 1.1218 will signal the presence of sellers. Crossing to the weak side of the downtrending Gann angle at 1.1214 will indicate the selling is getting stronger. This angle is the trigger point for an acceleration to the downside with the next targets 1.1185 and 1.1172.
The daily chart clearly shows the way of least resistance is down.
This article was originally posted on FX Empire
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