EUR/USD Forex Technical Analysis – Hovering Above 13-Month Low at 1.1312

The Euro hit a 13-month low early in the session on Tuesday as investors continued to express concerns over the exposure of European banks to the financial turmoil in Turkey. Worries have lingered about European banks’ loans to Turkey, stoking selling of regional stocks and the single currency.

The EUR/USD settled at 1.1343, down 0.0067 or -0.59%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1331 will continue the downtrend.

The EUR/USD is in no position to change the main trend to up, but it is in the window of time for a closing price reversal bottom. This chart pattern can fuel the start of a 2 to 3 day counter-trend rally.

Daily Technical Forecast

Early Wednesday, the EUR/USD is trading flat. We’re looking at the possibility of three developments today.

Firstly, we could see a steady opening, followed by a higher trade. This will indicate that buyers are coming in to defend yesterday’s low at 1.1331. This could generate enough momentum to fuel a short-covering rally into a steep downtrending Gann angle at 1.1428.

The Gann angle at 1.1428 forms a resistance cluster with yesterday’s high at 1.1430. Taking out this area will indicate the buying is getting stronger and make 1.1331 a new minor bottom.

Secondly, sellers could return, taking out 1.1331 in the process and continuing the downtrend. This could lead to a quick test of the July 5, 2017 main bottom at 1.1312. If this bottom fails then look for the selling to extend into the steep downtrending Gann angle at 1.1228. Crossing to the weak side of this  angle will put the EUR/USD in a bearish position.

Due to the prolonged move down in terms of price and time, we could see a third development. This would involve taking out yesterday’s low at 1.1331 then closing back above yesterday’s close at 1.1343. This closing price reversal bottom will not change the trend, but it will indicate the buying may be greater than the selling at current price levels, at least temporarily. This could trigger the start of a 2 to 3 day counter-trend rally.