EUR/USD Mid-Session Technical Analysis for December 16, 2019

The Euro is trading higher against the U.S. Dollar on Monday despite the release of disappointing Euro Zone manufacturing sector growth data for the month. Bond yields are holding steady which is helping to underpin the Euro.

The trade remains cautious as traders continue to digest the first-phase trade deal between the U.S. and China. A sense of clarity over Britain’s exit from the European Union following an emphatic general election win for the Conservative party is also being seen as supportive.

At 14:06 GMT, the EUR/USD is trading 1.1150, up 0.0032 or +0.29%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, Friday’s closing price reversal top may be slowing down the upside momentum.

A trade through 1.1200 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 1.1112 will confirm the closing price reversal top. This won’t change the trend, but it could lead to a 2 to 3 day correction. The main trend will actually change to down on a move through 1.0981.

On the upside, the resistance is a long-term Fibonacci level at 1.1185.

The short-term range is 1.0981 to 1.1200. Its retracement zone at 1.1091 to 1.1065 is potential support. Since the main trend is up, buyers could come in on a test of this area.

The main range is 1.0879 to 1.1200. Its retracement zone at 1.1040 to 1.1002 is another key support area.

Daily Technical Forecast

The key level to watch today is Friday’s low at 1.1112. Trader reaction to this level should determine the direction of the EUR/USD today.

Bullish Scenario

A sustained move over 1.1112 will indicate the presence of buyers. The first upside target is a minor pivot at 1.1156. This is followed by the main Fibonacci level at 1.1185, followed by the closing price reversal top at 1.1200.

Bearish Scenario

Taking out 1.1112 will confirm Friday’s closing price reversal top. This could trigger a break into the support cluster at 1.1091. Look for buyers to come in on a test of this level.

If 1.1091 fails as support then look for the selling to possibly extend into the short-term Fibonacci level at 1.1065.