EUR/USD Mid-Session Analysis for April 30, 2019

The Euro is trading higher on Tuesday after a report showed Euro Zone economic growth was stronger than expected in the first quarter, while unemployment fell to its lowest rate in more than a decade.

Eurostat said that gross domestic product in the Euro Zone rose 0.4 percent quarter-on-quarter n the first three months of 2019, up from 0.2 percent in the fourth quarter of 2018 and 0.1 percent in the third.

Year-on-year, Euro Zone GDP rose 1.2 percent, the same increase as in the last quarter of 2018. Traders were looking for a 0.3 percent quarterly increase and a 1.1 percent annual expansion.

Eurostat also said that Euro Zone unemployment fell to 7.7 percent.

At 12:00 GMT, the EUR/USD is trading 1.1220, up 0.0036 or +0.31%.

Daily Technical Analysis

The main trend is down according to the daily swing chart; however, momentum has been trending higher since last Friday’s closing price reversal bottom and yesterday’s subsequent confirmation. Today could be day two of a minimum three day rally that often corresponds with this chart pattern.

The market isn’t close to changing the main trend to up, but it is close to finishing a normal retracement of its main range. A trade through 1.1112 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is $1.1324 to 1.1112. Its retracement zone at 1.1218 to 1.1243 is the primary upside target. This zone is currently being tested.

On the downside, the major support is the long-term Fibonacci level at 1.1218.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1218.

Bullish Scenario

A sustained move over 1.1218 will indicate the buying is getting stronger. If the upside momentum continues then look for the rally to possibly extend into the Fibonacci level at 1.1243, followed by another downtrending Gann angle at 1.1264.

Bearish Scenario

A sustained move under 1.1218 will signal the return of sellers. This could trigger a pullback into the uptrending Gann angle at 1.1192, followed by 1.1185. The daily chart will open up to the downside under this Fib level with uptrending Gann angle support coming in at 1.1152.