The Euro is trading higher shortly before the U.S. opening. A weaker U.S. Dollar is contributing to the move. Flight-to-safety buying of Treasurys is driving down yields; this is helping to make the dollar a less attractive investment.
At 1014 GMT, the EUR/USD is at 1.1561, up 0.0042 or 0.38%.
Optimism over Brexit is also underpinning prices; however, gains could be limited by renewed concerns over Italy’s finances.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart; however, momentum has shifted to the upside on Wednesday. A trade through 1.1432 will signal a resumption of the downtrend.
The minor trend is up. It turned up on a trade through 1.1549 on Wednesday. This shifted momentum to the upside. The next minor top target is 1.1596.
The main range is 1.1301 to 1.1816. The market has been straddling its retracement zone at 1.1558 to 1.1498 for about eight sessions. Trader reaction to this zone will determine the near-term direction of the Forex pair.
The minor range is 1.1816 to 1.1432. If the upside momentum continues then look for a rally into its retracement zone at 1.1624 to 1.6693.
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Daily Technical Forecast
Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1558.
A sustained move over 1.1558 will signal the presence of buyers. This could generate the upside momentum needed to challenge the minor top at 1.1596 and the minor retracement zone at 1.1624 to 1.1669. Since the main trend is down, sellers could come in on a test of this zone.
A sustained move under 1.1558 will indicate the presence of sellers. The first downside target is the main Fib level at 1.1498. This is followed by 1.1432. If this market is going to move higher, it may have to pullback about 50% of the two-day rally to attract fresh counter-trend buyers.
This article was originally posted on FX Empire
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