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The Euro finished higher last week after touching its lowest level since the week-ending May 19, 2017. Support appears to be clustered around a pair of 2017 minor bottoms at 1.1118 to 1.1109. Buyers seem to be aware of the importance of this area. If you look at the weekly chart, you’ll see the next major support is 1.0569.
Last week, the EUR/USD settled at 1.1206, up 0.0049 or +0.43%.
Weekly Swing Chart Technical Analysis
The main trend is down according to the weekly swing. However, momentum may be getting ready to shift to the upside with the formation of a potentially bullish closing price reversal bottom.
A trade through 1.1108 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a trade through 1.1448. This is highly unlikely, however, there is room for a normal 50% to 61.8% retracement.
The minor trend is also down. A trade through 1.1265 will change the minor trend to up. This will also confirm the shift in momentum to up.
The main range is 1.10339 to 1.2555. Its retracement zone at 1.1447 to 1.1185 is controlling the longer-term direction of the Forex pair.
Weekly Swing Chart Technical Forecast
Based on last week’s price action and the close at 1.1206, the direction of the EUR/USD this week is likely to be determined by trader reaction to the major Fibonacci level at 1.1185.
Bullish Scenario
A sustained move over 1.1185 will indicate the presence of buyers. If this move generates enough upside momentum then look for a potential rally into the minor top at 1.1265. This is followed by another minor top at 1.1324, the main 50% level at 1.1447 and a main top at 1.1448.
Bearish Scenario
A sustained move under 1.1185 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into last week’s low at 1.1108.
Last week’s low is a potential trigger point for an acceleration to the downside. If you look at the weekly chart, there is no major support until 1.0569. Don’t expect the EUR/USD to get there all at once.
Once sellers can establish themselves on the weak side of the Fibonacci level at 1.1185, then look for them to come in more aggressively.
This article was originally posted on FX Empire