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EUR/USD Forex Technical Analysis – Taking Out 1.1017 Puts Forex Pair on Weak Side of Key Retracement Zone

Given the downside momentum by the Euro on Friday, we’re looking for sellers to go after the Fibonacci level at 1.1017 early Monday.
James Hyerczyk

The Euro finished sharply lower on Friday after hitting its lowest level since December 2. Driving the single-currency lower was trader conviction that European Central Bank (ECB) policymakers will maintain a loose monetary policy for the near future. Additionally, lackluster PMI added to expectations that a rate hike is ruled out for the rest of year.

On Friday, the EUR/USD settled at 1.1026, down 0.0032 or -0.29%.

Driven by renewed institutional selling since the start of the year, the Euro is set for its worst start to the year in five years, down 1.69% so far this month.

Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The next main bottom comes in at 1.0981. Taking out this bottom will indicate the selling pressure is getting stronger. It’s also the last main bottom before the October 1, 2019 main bottom at 1.0879.

The minor trend is also down. It will change to up on a move through 1.1109. This will also shift momentum to the upside.

The main range is 1.0879 to 1.1239. Its retracement zone is 1.1059 to 1.1017. This zone is controlling the near-term direction of the EUR/USD. The Forex pair closed inside this zone on Friday.

Short-Term Outlook

Given the downside momentum by the Euro on Friday, we’re looking for sellers to go after the Fibonacci level at 1.1017 early Monday. This is a potential trigger point for an acceleration to the downside into a potential support cluster at 1.0981 to 1.0980.

The next target under 1.0980 is an uptrending Gann angle at 1.0930. This is the last potential support angle before the October 1, 2019 main bottom at 1.0879.

On the upside, resistance is a downtrending Gann angle at 1.1053. This angle has been guiding the EUR/USD lower since the 1.1173 main top on January 16.

Side Notes

With the U.S. Federal Reserve likely to remain on hold on Wednesday while the ECB continues to explore their options to add liquidity, it’s difficult to see a reason to buy the EUR/USD. Look to sell rallies over the near-term.

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