The Euro is trading higher against the U.S. Dollar late in the session on Monday after President Donald Trump said over the weekend that trade talks with China were moving along “very nicely,” but that the United States would only make a deal with Beijing if it was right for America. Trump also said there had been incorrect reporting about U.S. willingness to lift tariffs on Chinese goods. Officials from China and the United States last Thursday said the two countries had agreed to roll back tariffs already in place in a “phase one” trade deal.
At 18:09 GMT, the EUR/USD is trading 1.1038, up 0.0018 or +0.17%.
The U.S. is on a bank holiday so one has to take the move in the EUR/USD with a grain of salt since the major U.S. players are absent. However, it is possible that frustrated and confused traders have decided to book profits after a steep sell-off last week, while changing their view from optimistic to pessimistic.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed early in the session before the selling dried up and the Euro rebounded enough to turn higher for the session. A trade through the intraday low at 1.1016 will reaffirm the downtrend.
The EUR/USD is in no position to change the main trend to up, but it started the session down seven days from the last swing top, putting inside the window of time for a potentially bullish closing price reversal bottom. A close above 1.1020 will form this chart pattern.
The main range is 1.0879 to 1.1179. Its retracement zone at 1.1029 to 1.0994 is currently being tested. The price action the past two sessions indicates investors view this area as support.
The new short-term range is 1.1176 to 1.1016. If a closing price reversal bottom triggers a short-covering rally then its 50% level at 1.1096 will become the primary upside target.
Daily Technical Forecast
Besides the retracement zone at 1.1029 to 1.0994, the EUR/USD also hit a cluster of Gann angles at 1.1024, 1.1029 and 1.1036. Based on the late session price action, the direction of the Forex pair on Monday is likely to be determined by trader reaction to Friday’s close at 1.1020.
A sustained move over 1.1020 will indicate the presence of buyers. This will put the EUR/USD in a positon to form a closing price reversal bottom. Overtaking a downtrending Gann angle at 1.1036 will indicate the buying is getting stronger.
If the move over 1.1036 can generate enough upside momentum then look for a potential acceleration to the upside into the close, or a 2 to 3 day counter-trend rally back to at least 1.1096.
A sustained move under 1.1020 will signal the presence of sellers. Not only will it put the EUR/USD lower for the session, but it will also put it under an uptrending Gann angle at 1.1024, indicating the selling pressure is getting stronger.
Taking out 1.1016 could lead to a late-session test of the Fibonacci level at 1.0994 and the minor bottom at 1.0991.
Using our Gann angles as our guide, look for the EUR/USD to strengthen over 1.1036, and to weaken under 1.1024.
This article was originally posted on FX Empire
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