EUR/USD Forex Technical Analysis – In Position to Shift Momentum with Closing Price Reversal Bottom Formation

The Euro is trading higher against the U.S. Dollar late Wednesday after clawing back an earlier loss, putting it in a position to possibly post a daily closing price reversal bottom. If formed and confirmed, this chart pattern often triggers the start of a 2 to 3 day counter-trend rally. It doesn’t mean the trend has turned, but usually indicates the buying is greater than the selling at current price levels.

At 1814 GMT, the EUR/USD is trading 1.1345, up 0.0017 or +0.15%.

Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, today’s session began with the EUR/USD in the window of time for a closing price reversal bottom. After taking out the July 5, 2017 main bottom at 1.1312 and hitting 1.1301, the Forex pair has rebounded enough to turn higher for the session. If it can hold on to this gain into the close then the closing price reversal bottom will form.

If a short-term range forms between 1.1628 and 1.1301 and we get the reversal bottom then its 50% level at 1.1465 will become the primary upside target.

Daily Technical Forecast

Based on the current price, the direction of the EUR/USD into the close is likely to be determined by trader reaction to yesterday’s close at 1.1343.

A sustained move over 1.1343 will indicate the buying is getting stronger. This could be speculative counter-trend buying, but most likely short-covering, following the prolonged move down in terms of price and time.

If this chart pattern forms and is confirmed on Thursday then we could see a surge into the steep downtrending Gann angle, currently at 1.1428. This is followed by the 50% level at 1.1465.

A sustained move under 1.1343 will signal that the sellers are still in control. This could lead to a retest of 1.1312 and today’s low at 1.1301. Taking out the latter will indicate the selling pressure is getting stronger.

This article was originally posted on FX Empire

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