The Euro whipsawed against the U.S. Dollar on Thursday before settling into a range. The single-currency rallied against the greenback amid an uptick in Euro Zone business growth, but the rally stalled and the Euro became rangebound as traders were reluctant to take on risk ahead of Federal Reserve Chair Jerome Powell’s key speech at Jackson Hole, Wyoming on Friday.
At 15:28 GMT, the EUR/USD settled at 1.1085, up 0.0001 or +0.01%.
Euro Zone business growth picked up in August, as services expanded and manufacturing contracted at a slower pace. But trade war fears knocked future expectations to their weakest in over six years, a survey showed.
Wednesday’s Fed minutes confirmed a growing view that central bank policymakers are reluctant to being a big rate-cutting cycle in the coming months. However, given the weakening economy, Jackson Hole is going to provide an opportunity for the Fed to correct that communication mistake in the minutes. Traders want Powell to show an aggressive front in an effort to perk up the economy and prevent a U.S. recession.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the closing price reversal bottom at 1.1066. However, the move was likely fueled by sell stops since the selling stalled at 1.1064. Taking out this intraday low with conviction could drive prices toward the 1.1027 main bottom.
The minor trend is also down. A trade through 1.1114 will change the minor trend to up. This will also shift momentum to the upside.
Daily Technical Forecast
Based on today’s wide range and current price at 1.1085, 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 1.1112 and the uptrending Gann angle at 1.1066.
A sustained move under 1.1066 will indicate the selling is getting stronger. This could lead to a test of the main bottom at 1.1027. Crossing to the weak side of the downtrending Gann angle at 1.1012 will put the EUR/USD in an extremely bearish position.
Taking out and sustaining a rally over 1.1112 will signal the presence of buyers. This should create the upside momentum needed to take out the minor top at 1.1114. This should lead to a test of the downtrending Gann angle at 1.1130 and a 50% level at 1.1139.
This article was originally posted on FX Empire
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