EUR/USD Mid-Session Technical Analysis for February 14, 2020

The Euro is edging higher on Friday despite another report showing a slowing economy. The price action suggests profit-takers are coming in ahead of the weekend. Disappointing U.S. Retail Sales data may also be giving investors an excuse to book profits.

Euro Zone economic growth slowed as expected in the last three months of 2019 as gross domestic product shrank in France and Italy against the previous quarter, but unemployment growth picked up more than expected, official estimates showed on Friday.

The European Union’s statistics office Eurostat said GDP in the 19 countries sharing the Euro expanded 0.1% quarter-on-quarter in the October-December period, as announced on January 31, for a 0.9% year-on-year gain – a downward revision from the previously estimated 1.0% growth.

At 13:47 GMT, the EUR/USD is trading 1.0851, up 0.0012 or +0.11%.

U.S. consumer spending appears to have slowed further in January, with sales at clothing stores declining by the most since 2009, which could raise concerns about the economy’s ability to continue expanding at a moderate pace.

The Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services were unchanged last month. Data for December was revised down to show the so-called core retail sales rising 0.2% instead of jumping 0.5% as previously reported.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today. The main trend will change to up on a move through 1.1095. This is highly unlikely, however, the early price action suggests a closing price reversal bottom may be forming. This won’t change the trend to up, but it could trigger the start of a 2 to 3 day short-covering rally.

The minor trend is also down. A trade through 1.0926 will change the minor trend to up. This will also shift momentum to the upside.

Daily Forecast

Based on the early price action and the current price at 1.0851, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to Thursday’s close at 1.0840.

Bullish Scenario

A sustained move over 1.0840 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the former bottom at 1.0879 and the downtrending Gann angle at 1.0895. Taking out this angle could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 1.0840 will signal the presence of sellers. This could lead to a retest of the intraday low at 1.0827.