EUR/USD Mid-Session Technical Analysis for April 19, 2019

The Euro is rebounding on Friday after the previous session’s steep break. Don’t read into the price action, however. It’s only position-squaring ahead of the long Easter holiday week-end. The major players – banks and institutions – are on the sidelines so volume is extremely low and the trading range tight. When trading resumes on Monday, the signal currency is likely to be under pressure due to renewed concerns over the Euro Zone economy and the possibility of more stimulus from the European Central Bank.

At 13:39 GMT, the EUR/USD is trading 1.1245, up 0.0015 or +0.13%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A move through 1.1324 will signal a resumption of the uptrend. A trade through 1.1184 will change the main trend to down.

The minor trend is down. It turned down on Thursday when sellers took out the previous minor bottom at 1.1230. This shifted momentum to the downside.

The main range is 1.1448 to 1.1184. Its retracement zone at 1.1316 to 1.1347 is resistance. It stopped the rally at 1.1324 on April 12.

The short-term range is 1.1184 to 1.1324. Its retracement zone at 1.1254 to 1.1238 is currently being tested. This zone is very important to the structure of the chart pattern.

Aggressive buyers are likely to come in on a test of this zone. They are going to try to produce a potentially bullish secondary higher bottom. Bearish sellers are going to try to drive the EUR/USD through this zone as they try to turn 1.1324 into a new main top.

Daily Technical Forecast

Based on Friday’s limited price action, trader reaction to the short-term Fibonacci level at 1.1238 is likely to determine the near-term direction of the EUR/USD.

Bullish Scenario

A sustained move over 1.1238 will indicate the return of buyers. The first two targets are an uptrending Gann angle at 1.1249 and a short-term 50% level at 1.1254. The latter is the trigger point for an acceleration to the upside. The daily chart shows there is plenty of room to the upside with the next target the main 50% level at 1.1316.

Bearish Scenario

A sustained move under 1.1238 will signal the presence of sellers. Crossing to the weak side of the downtrending Gann angle at 1.1228 will indicate the selling is getting stronger. This could lead to a test of the next uptrending Gann angle at 1.1217. This is the last potential support angle before the major support at 1.1185, 1.1184 and 1.1177.

I don’t expect to see much movement the rest of the session. Essentially, the EUR/USD could strengthen over 1.1254 and weaken under 1.1238. However, the extremely light volume will lead to limited gains and limited losses. Furthermore, buying strength and selling weakness is not advised today.