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EUR/USD Mid-Session Technical Analysis for April 20, 2018

James Hyerczyk
Updated

The Euro is under pressure amid talk that investors are growing nervous that the Euro Zone economy’s rebound is nearing the top and the European Central Bank may move more slowly to tighten monetary policy.

At the same time the current price action in the U.S. Dollar indicates that the relatively optimistic view about the U.S. economy should be enough to support the Fed’s notion to raise interest rates at least two more time in 2018. Some traders are even pricing in as many as three rate hikes.

EURUSD
Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Tuesday’s closing price reversal top at 1.2413 is also weighing on prices. A trade through this price will change the main trend to up.

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The minor trend turned down earlier in the session when sellers took out the last minor bottom at 1.2299.

Given the downside momentum, the next downside target comes in at 1.2214.

On the upside the resistance is a retracement zone at 1.2354 to 1.2401.

The short-term range is 1.2214 to 1.2413. Its retracement zone at 1.2313 to 1.2290 was the primary downside target. This zone is currently being tested. It is also controlling the near-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

Based on the current 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 1.2290.

A sustained move through 1.2290 will indicate the selling pressure is getting stronger. The daily chart is wide open to the downside with 1.2214 the next major downside target.

Holding 1.2290 will signal the return of buyers. This could generate a return to the short-term 50% level at 1.2313. Overtaking this level will indicate the buying is getting stronger. If this move generates enough upside momentum we could see a return rally into the main 50% level at 1.2354.

This article was originally posted on FX Empire

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