EUR/USD Mid-Session Technical Analysis for December 24, 2019

The Euro is down slightly against the U.S. Dollar at the mid-session on Tuesday, hovering near a two-week low, as optimism about improved U.S.-China trade relations supported the dollar, although the volatility in the currency markets remains well-below average at the start of the holiday season.

There is not much guidance for traders on Tuesday so don’t expect much of a price range. U.S. Treasury yields are locked in a narrow range, at the start of its shortened day of trading. U.S. Treasury markets will finish trading early on December 24 and will be closed on December 25, Christmas Day.

At 13:36 GMT, the EUR/USD is trading 1.1081, down 0.0009 or -0.08%.

On the data front, Philadelphia Fed non-manufacturing figures are due out at 13:30 GMT and a Richmond Fed survey is out at 15:00 GMT. There are no Treasury auctions scheduled for Tuesday.

Daily Technical Analysis

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

A trade through 1.1200 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 1.0981.

The short-term range is 1.0981 to 1.1200. The EUR/USD is currently trading inside its 50% to 61.8% retracement zone at 1.1091 to 1.1065.

The main range is 1.0879 to 1.1200. Its retracement zone at 1.1040 to 1.1002 is more important to the longer-term structure of the chart pattern.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the support cluster at 1.1066 to 1.1065.

Bullish Scenario

A sustained move over 1.1066 will indicate the presence of buyers. If this move is able to attract some buyers then look for a drive into the short-term 50% level at 1.1091. This is a potential trigger point for a breakout to the upside, however, it’s not likely to be successful unless there is rising volume behind the move.

Bearish Scenario

A sustained move under 1.1065 will signal the presence of sellers. This could trigger a sharp break to the downside with the next target 1.1040. However, make sure the volume is on your side, or you may get caught shorting into a bear trap.

Side Notes

Essentially, we’re looking at a potential upside bias developing over 1.1091 and the downside bias continuing or expanding under 1.1065.