The Euro is trading higher on Monday, but inside Friday’s expanded range. The price action suggests investor indecision and impending volatility. The single currency also formed a potentially bullish closing price reversal bottom on Friday, suggesting the buying may be greater than the selling at current price levels. If confirmed, this could trigger a 2 to 3 day counter-trend rally.
At 09:38 GMT, the EUR/USD is trading 1.1162, up 0.0018 or +0.16%.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, Friday’s closing price reversal bottom suggests the momentum may be shifting to the upside. A trade through 1.1174 will confirm the chart pattern. This could trigger the start of a 2 to 3 day rally.
A move through 1.1112 will negate the closing price reversal bottom and signal a resumption of the downtrend. Taking out 1.1109 could trigger an acceleration to the downside.
A major Fibonacci level at 1.1185 is the first resistance.
The main range is 1.1324 to 1.1112. Its retracement zone at 1.1218 to 1.1243 is the next upside target.
Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD on Monday is likely to be determined by the downtrending Gann angle at 1.1168.
A sustained move over 1.1168 will indicate the presence of buyers. Taking out 1.1174 will confirm the closing price reversal bottom. This could trigger a further rally into 1.1185.
The rally starts to expand to the upside over 1.1185 with the next target a resistance cluster at 1.1214 to 1.1218.
A sustained move under 1.1168 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into Friday’s low at 1.1112.
This article was originally posted on FX Empire