The EUR/USD is trading higher at the mid-session. Sellers hit the market earlier in the session, but enough profit-takers and aggressive counter-trend buyers came in to stop the move and turn the market up for the day. The Euro is now in a position to post a closing price reversal bottom.
Following the prolonged move down in terms of price and time, the EUR/USD was probably due for a reversal, however, we were looking at the 7 to 10 day period. Today is only the 6th day down.
The trend is not likely to change to up on this move, but we could see a 1 to 2 day rally leading up to Thursday’s European Central Bank monetary policy decision.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, today’s price action suggests the buying may be greater than the selling at current price levels. The selling stopped at 1.2181 just short of a pair of retracement levels at 1.2166 and 1.2160, and a main bottom at 1.2153. Overcoming the previous main bottom at 1.2214 will also indicate the return of buyers.
On the upside, the next target is a major 50% level at 1.2235. This level may act like a pivot.
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 a pair of Gann angles at 1.2213 and 1.2201.
A sustained move over 1.2213 will indicate the presence of buyers. This could create the upside momentum needed to challenge 1.2235, followed by an uptrending Gann angle at 1.2248 and a downtrending Gann angle at 1.2276.
A sustained move under 1.2201 will signal the presence of sellers. This could trigger a resumption of the downtrend with the next targets coming in at 1.2166, 1.2160 and 1.2153.
This article was originally posted on FX Empire
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