The Euro is trading lower on Thursday, but bouncing back after trading near its lowest level since June 20, 2017. The Euro is trading near a 22-month low, pressured by weakening growth in Germany and renewed political tensions in Spain. Traders are saying economic concerns combined with political uncertainties are driving the short-term price action after the European Central Bank decided to push out the timing of its next rate hike into 2020 earlier in the year.
At 14:13 GMT, the EUR/USD is trading 1.1148, down 0.0005 or -0.04%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. Today’s low at 1.1118 was essentially a test of the June 20, 2017 bottom at the same price. This is followed by the May 30, 2017 main bottom at 1.1109. Under this level is nothing but air so it’s important that buyers come in at this time to defend against a steep decline.
The EUR/USD is in no position to change the main trend to up, but it is down nine sessions from its last main top which puts it in a position to form a potentially bullish closing price reversal bottom. It would have to close over 1.1152 to form this chart pattern.
Daily Technical Forecast
Based on the early price action and the current price at 1.1148, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to 1.1152.
Taking out 1.1152 will turn the EUR/USD higher for the session. If this move creates enough upside momentum then look for a potential surge into a major Fibonacci level at 1.1185, followed by a downtrending Gann angle at 1.1188. Since the main trend is down, sellers could come in on a test of 1.1185 to 1.1188. Overcoming 1.1188 could trigger an acceleration to the upside.
A sustained move under 1.1152 will indicate the presence of sellers. This could lead to a retest of 1.1118 then 1.1109. Look out to the downside if 1.1109 fails as support.
This article was originally posted on FX Empire
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