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EUR/USD Mid-Session Technical Analysis for December 10, 2018

The Euro is trading higher on Monday shortly before the U.S. opening. The single-currency rallied to its highest level since November 20 earlier in the session despite protests in France. The rally was fueled by a weaker U.S. Dollar, falling Treasury yields and lower demand for risky assets. The Euro began to retreat from its highs when stocks started to recover. This made the dollar a more attractive asset. It also encouraged Treasury traders to book profits, driving yields higher.

At 1106 GMT, the EUR/USD is trading at 1.1411, up 0.0016 or +0.14%.

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Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the main swing chart. However, momentum is trending higher. A trade through 1.1474 will change the main trend to up. A trade through 1.1267 will signal a resumption of the downtrend.

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The minor trend is up. This is why the momentum is trending higher. The upside momentum is also being fueled by the closing price reversal bottom from November 28.

The price action is being controlled by a series of 50% retracement levels at 1.1371, 1.1359 and 1.1345.

Daily Swing Chart Technical Forecast

Today is the 8th day up from the closing price reversal bottom at 1.1267 from November 28. This puts it in the window of time for a potentially bearish closing price reversal top. We’ve already had the higher-high, now all we need is a lower close to form the chart pattern.

Bullish Scenario

Holding above Friday’s close at 1.1395 will indicate the presence of buyers. Taking out today’s intraday high at 1.1444 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to possibly extend into the main top at 1.1474. Taking this top out will change the main trend to up.

Bearish Scenario

Holding below the intraday high at 1.1444 will signal the presence of sellers. Turning lower for the session on a move through 1.1395 will indicate the buying is getting stronger. This could also trigger an acceleration to the downside with the first downside target 1.1371, followed by 1.1359 and 1.1345.

Closing below 1.1395 will also form a closing price reversal top. If confirmed on Tuesday, this could lead to the start of a 2 to 3 correction.

This article was originally posted on FX Empire

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