The Euro is trading slightly better shortly after the opening in Europe. An easing of tensions between Italy and the European Union is helping to generate some support. The dollar is under pressure because of a drop in U.S. Treasury yields. Later today, investors will get the opportunity to react to the latest report on U.S. Producer Inflation.
At 0625 GMT, the EUR/USD is trading 1.1501, up 0.0009 or +0.08%.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. The main trend changes to up on a trade through 1.1816. A move through 1.1432 will signal a resumption of the downtrend. The next target under this main bottom is 1.1301.
The minor trend is also down. Today’s early price action made 1.1432 a new minor bottom. A trade through this level will reaffirm the trend.
A trade through 1.1549 will change the minor trend to up. This will also shift momentum to the upside. The next minor top target is 1.1596.
The main range is 1.1301 to 1.1816. Its retracement zone at 1.1559 to 1.1498 is currently being tested. This zone is controlling the near-term direction of the EUR/USD.
If a main bottom develops between 1.1816 and 1.1432 then its retracement zone at 1.1624 to 1.1669 becomes the primary upside target.
- Major U.S. Stock Indexes Swing Both Ways as Investors Adjust to Rate Increases
- The Aussie and Kiwi Dollar Rally as U.S Treasury Yields Ease Back
- Here’s Why You Should Follow the Italian/German Bond Yield Gap?
Daily Swing Chart Forecast
Based on the early price action, the direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at 1.1498.
A sustained move over 1.1498 will signal the presence of buyers. If this move can create enough upside momentum then look for a potential move into 1.1549 to 1.1559. Since the trend is down, sellers could come in on a test of this level.
Taking out 1.1559 could trigger an acceleration to the upside with targets at 1.1596 and 1.1624.
A sustained move under 1.1498 will signal the presence of sellers. If this move creates enough downside momentum then look for a retest of 1.1432. This is a potential trigger point for a steep sell-off with 1.1301 the next target.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Oil Price Fundamental Daily Forecast – IMF Report Stirs Demand Worries, Hurricane Threatens U.S. Production
- USD/CAD Daily Price Forecast – Canadian Loonie Gains Upper Hand on Weak USD in Broad Market
- SimpleFX Celebrates 2.0 Launch by Cutting Spreads by 20%
- Price of Gold Fundamental Daily Forecast – PPI Downside Miss Could Spike Gold Prices $10 Higher
- USD/JPY Fundamental Daily Forecast – Bullish Traders Need Higher PPI to Justify Recent Price Surge
- GBP/USD Daily Price Forecast – GBP/USD Moves Up On Brexit Optimism Ahead of UK GDP Update