The EUR/USD posted a two-sided trade on Tuesday under relatively thin trading conditions. The Euro tried to breakout to the upside early but didn’t have enough buying volume to succeed. It seemed traders weren’t too committed to either direction due to Wednesday’s U.S. Federal Reserve announcement.
In other news, data showed U.S. consumer spending increased solidly in June, while inflation rose moderately. Other data showed employers boosting benefits for workers in the second quarter, but wage growth slowed.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is down. It’s been sideways to lower since the closing price reversal top at 1.1751 on July 23. A trade through this top will negate the chart pattern and signal a resumption of the uptrend. The main trend will change to down on a move through 1.1621.
The EUR/USD has been having trouble with the retracement zone at 1.1680 to 1.1720. Although there have been several breakouts through the top end of the zone, buyers have been unable to hold the Forex pair above it. Furthermore, the market hasn’t strayed too far under the lower or 50% level at 1.1680.
The short-term range is 1.1575 to 1.1751. Its retracement zone at 1.1663 to 1.1642 is acting like support.
Daily Swing Chart Technical Forecast
Based on Tuesday’s close and the early trade on Wednesday, the direction of the EUR/USD today is likely to be determined by trader reaction to the major 50% level at 1.1680.
A sustained move over 1.1680 will indicate the presence of buyers. If this attract enough interest, the EUR/USD could really back to 1.1720.
Crossing to the strong side of 1.1720 will indicate the buying is getting stronger. However, the Euro is going to have to take out 1.1751 in order to have a chance at a breakout to the upside.
A sustained move under 1.1680 will signal the presence of sellers. This could lead to a labored break with potential downside targets coming in at 1.1663, 1.1642 and 1.1621.
Taking out 1.1621 will change the main trend to down. This is a potential trigger point for an acceleration to the downside with 1.1575 the next major target.
Basically, we’re going to be rangebound until buyers can take out 1.1751 or sellers can break through 1.1621.