EUR/USD Analysis – The EUR/USD is trading nearly flat at the mid-session as investors look ahead to the long-U.S. holiday weekend. The price action suggests that many of the major players have already packed it in. The inside move taking place indicates investor indecision and impending volatility.The main trend is down according to the daily swing chart. However, momentum has been to the upside all week.The main range is 1.0821 to 1.1616. Its retracement zone is 1.1125 to 1.1219. The Fibonacci level of this range at 1.1125 is currently being tested. It has been rejected twice this week.The short-term range is 1.1426 to 1.0910. Its retracement zone at 1.1168 to 1.1229 is the primary upside target.
Based on yesterday’s close at 1.1044 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the main Fib level at 1.1125.Taking out 1.1125 will signal the presence of buyers. This could create enough upside momentum to drive the Euro into the short-term 50% level at 1.1168. This is followed closely by a long-term downtrending angle at 1.1186.
The angle at 1.1186 is the trigger point for an acceleration to the upside with the next target a price cluster at 1.1219, 1.1226 and 1.1229.The daily chart indicates there is plenty of room to the upside if 1.1229 is taken out with conviction with the next major target coming in at 1.1401.A sustained move under 1.1125 will indicate the presence of sellers. This could create enough downside momentum to challenge a long-term uptrending angle at 1.1024. We could see an acceleration to the downside if this angle is taken out. This could lead to a test of an angle at 1.0922. This angle stopped the break last week. It is also the last support angle before the 1.0910 low and the 1.0821 main bottom.Watch the price action and read the order flow at 1.1125 today. Trader reaction to this level will tell us if the buying is increasing or if sellers are regaining control.
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