EUR/USD Mid-Session Technical Analysis for April 1, 2020

The Euro is trading lower against the U.S. Dollar on Wednesday after a report showed Euro Zone factory activity crashed in March as coronavirus spread and European yields fell as investors looked for safety.

Euro Zone manufacturing activity collapsed last month as breaks in global supply chains caused by measures to curb the coronavirus pandemic crushed output, and the nosedive could worsen in coming months, a survey showed on Wednesday.

At 12:07 GMT, the EUR/USD is trading 1.0935, down 0.0101 or -0.91%.

IHS Markit’s final March manufacturing Purchasing Managers’ Index (PMI) sank to 44.5, below a flash reading of 44.8 and February’s 49.2. The reading was the lowest since mid-2012, when the Euro Zone debt crisis was raging, and well below the 50 mark separating growth from contraction.

In other news, Euro Zone bond yields fell on Wednesday, with investors rushing into safe-haven government debt as the continuing spread of the novel coronavirus fed risk-off sentiment.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A new main top has formed at 1.1147. A trade through this top will change the main trend to up. A move through 1.0636 will signal a resumption of the downtrend.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1066 to 1.1167 is the primary upside target. This zone stopped the buying on March 27 at 1.1147.

The minor range is 1.0636 to 1.1147. Its retracement zone at 1.0892 to 1.0831 is the primary downside target.

Daily Technical Forecast

Based on the early price action and the current price at 1.0935, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the uptrending Gann angle at 1.0916. This angle stopped the selling earlier in the session.

Bullish Scenario

A sustained move above 1.0916 will indicate the presence of buyers. This could lead to a retest of the downtrending angle at 1.1027 that stopped the buying earlier today. Overcoming this angle could trigger a small surge into a resistance cluster at 1.1066 to 1.1087.

Bearish Scenario

A sustained move under 1.0916 will signal the presence of sellers. This should lead to a test of the minor 50% level at 1.0892, followed by the minor Fibonacci level at 1.0831.

Aggressive counter-trend buyers could come in on a test of 1.0892 to 1.0831. They are going to try to form a secondary higher bottom.

If 1.0831 fails then look for the selling to extend into the next uptrending Gann angle at 1.0776.