EUR/USD Mid-Session Technical Analysis for December 18, 2019

The Euro is trading lower against the U.S. Dollar on Wednesday. The weakness is being fueled by stronger-than-expected U.S. economic data that suggested the Federal Reserve was unlikely to cut interest rates further. Renewed concerns over a hard Brexit could also be putting pressure on the single-currency.

Perhaps helping to limit losses is a report that showed German business morale rose more than expected in December, according to a survey released on Wednesday. This could be another sign that a manufacturing slump in Europe’s largest economy may be bottoming out after output shrank earlier in the year.

At 13:17 GMT, the EUR/USD is trading 1.1113, down 0.0036 or -0.32%.

Daily Technical Analysis

The main trend is up, but momentum has been trending lower since the formation of the closing price reversal on December 13 at 1.1200. The chart pattern was confirmed earlier today when sellers took out 1.1112.

A trade through 1.1200 will negate the chart pattern and signal a resumption of the uptrend. A move through 1.0981 will change the main trend to down.

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

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

Daily Technical Forecast

Based on the early price action and the current price at 1.1113, 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 1.1111.

Bullish Scenario

A sustained move over 1.1111 will indicate the return of buyers. If this move creates enough upside momentum, the EUR/USD could retrace back to 1.1156 over the near-term.

Bearish Scenario

A sustained move under 1.1111 will signal the selling pressure is getting stronger. This could trigger a break into the short-term 50% level at 1.1091. Look for buyers on the first test of this level. If it fails then look for the selling to possibly extend into the short-term Fibonacci level at 1.1065.