EUR/USD Mid-Session Technical Analysis for December 23, 2019

The Euro is edging a little higher against the U.S. Dollar on Monday shortly before the U.S. opening. Volume is on the light side as most of the major currency players have chosen to sit out this session ahead of the Christmas holiday, while some may be sticking around for today’s economic reports.

At 11:35 GMT, the EUR/USD is trading 1.1079, up 0.0004 or +0.03%.

We could see a spike in activity at 13:30 GMT with the release of the U.S. Core Durable Goods Orders and Durable Goods Orders reports. These reports will be followed by data on New Home Sales and the Treasury Currency Report.

In other news, Reuters is reporting that Euro Zone bond yields drifted down on Monday, as investors plumped for the safety of safe-haven government debt in thin pre-holiday trade.

French, German and Dutch 10-year bond yields last week hit their highest levels in around six months in the wake of a decision by Sweden’s central bank to hike interest rates out of negative territory. But they dipped 1-2 basis points in early Monday trade, reflecting demand for safe-haven sovereign debt ahead of the Christmas holiday period.

Germany’s benchmark 10-year Bund was 2 bps lower at -0.27%, almost 6 bps below last week’s six-month high.

Elsewhere, European Central Bank Governing Council member Klaas Knot said interest rates in the Euro Zone could remain historically low for years, but the ECB’s ultra-loose monetary policy risks becoming counterproductive, Reuters reported.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on December 13 at 1.1200.

A trade through 1.1200 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 1.0981.

The short-term range is 1.0981 to 1.1200. Its retracement zone at 1.1091 to 1.1065 is currently being tested and could develop into a support base if buyers decide to come in to defend the single-currency.

The main range is 1.0879 to 1.1200. Its retracement zone at 1.1040 to 1.1002 represents value. This is the last potential support zone before the 1.0981 main bottom.

Daily Technical Forecast

Based on the early price action and the current price at 1.1079, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the short-term 50% level at 1.1091.

Bullish Scenario

A sustained move over 1.1091 will indicate the presence of buyers. If this move gains traction then look for the buying to possibly extend into a downtrending Gann angle, currently at 1.1140, over the near-term.

Bearish Scenario

A sustained move under 1.1091 will signal the presence of sellers, or the lack of buyers. This could lead to a test of a Fibonacci level at 1.1065, followed by an uptrending Gann angle at 1.1061.

Look for an acceleration to the downside if 1.1061 is taken out.