EUR/USD Mid-Session Technical Analysis for May 24, 2016

The EUR/USD is trading lower at the mid-session. Sellers hit the Forex pair after the German ZEW indicator unexpectedly fell in May. Germany’s economic sentiment weakened for the first time in three months, defying expectations for improvement.

Technically, the main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out the previous swing bottom at 1.1179 earlier in the session. The new main top is 1.1242. A trade through this top will turn the main trend to up. ‘

Based on the last price at 1.1180, the selling pressure is likely to continue as long as the EUR/USD remains below the downtrending angle at 1.1202. This is the nearest resistance.

If the selling pressure continues under 1.1179 then look for sellers to continue to press the market with the March 24, 2016 main bottom at 1.1144 the next target. This is followed by the main Fibonacci level at 1.1125.

Look for sellers to return on the first test of 1.1202, but if it is taken out then the short-covering rally could extend into the main 50% level at 1.1219 or the next downtrending angle at 1.1222.

Regaining the former bottom at 1.1179 will also be a sign of a short-term bottom. This will indicate that the selling down to today’s low at 1.1168 was fueled by sell stop rather than fresh shorts. This type of price action could trigger a retracement back to 1.1202 also.

Day-traders should treat the old bottom at 1.1179 as a pivot.