EUR/USD Mid-Session Technical Analysis for February 12, 2019

The Euro is trading higher on a weaker U.S. Dollar amid renewed optimism over a trade deal between the United States and China, and reports that Republicans and Democrats have struck a deal to avert a government shutdown. The move is being fueled partly by the liquidation of long-dollar hedges placed as safe-haven protection.

At 1528 GMT, the EUR/USD is trading 1.1291, up 0.0016 or +0.14%.

Additionally, just a short while ago, UK Prime Minister pleaded with MPs to “hold our nerve” after a cabinet minister admitted that the UK could be days from a no-deal Brexit before the Commons votes on her plan.

In a speech to parliament on Tuesday, Ms. May said:  “The talks are at a crucial stage. We now all need to hold our nerve to get the changes this House requires and deliver Brexit on time.”

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session. A trade through the intraday low at 1.1257 will indicate the selling is getting stronger.

The EUR/USD is far from changing its trend to up, but it is down eight trading sessions from the last main top which puts it in the window of time for a potentially bullish closing price reversal bottom. We’ve already had the lower-low, now all we need is to finish over yesterday’s close at 1.1275 to complete the chart pattern.

The main range is 1.1514 to 1.1257. If the closing price reversal bottom is formed and confirmed then we could see a 2 to 3 day counter-trend rally with its retracement zone at 1.1386 to 1.1416 the next likely upside target.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to yesterday’s close at 1.1275.

Bullish Scenario

A sustained move over 1.1275 will indicate the presence of buyers. If this move can create enough upside momentum then look for the buying to possibly extend into the downtrending Gann angle at 1.1354. Since the main trend is down, sellers could come in on a test of this angle.

Bearish Scenario

A sustained move under 1.1275 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible retest of today’s intraday low at 1.1257. Taking out this level will reaffirm the downtrend with the November 12 bottom at 1.1216 the next likely downside target.

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