EUR/USD Mid-Session Technical Analysis for February 19, 2020

The Euro is inching higher against the U.S. Dollar on Wednesday after hitting a multi-year low earlier in the session. The rebound rally is likely being fueled by the hopes that the impact of the coronavirus epidemic on the global supply chain would be short-lived.

In other news, the Euro Zone recorded a current account surplus equal to 3.1% of its gross domestic product last year, unchanged from 2018, the European Central Bank said on Wednesday.

“According to preliminary results for 2019 as a whole, the current account recorded a surplus of 362 billion Euro (3.1% of Euro area GDP), compared with a surplus of 359 billion Euro (3.1% of Euro area GDP) in 2018,” the ECB said in a press release.

At 12:48 GMT, the EUR/USD is trading 1.0798, up 0.0005 or +0.05%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, the early price action suggests the EUR/USD may be trying to form a closing price reversal bottom.  If formed and confirmed, this chart pattern won’t change the main trend to up, but it will shift momentum to the upside.

A trade through 1.0785 will signal a resumption of the uptrend. A close over 1.0793 will form a closing price reversal bottom.

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.

Additional upside targets are the former bottoms that could become new tops at 1.0838 and 1.0879.

Daily Technical Forecast

Based on the early price action and the current price at 1.0798, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s close at 1.0793.

Bullish Scenario

A sustained move over 1.0793 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the steep downtrending Gann angle at 1.0835. This is followed closely by the former main bottom at 1.0838.

We could see an acceleration to the upside if buyers take out 1.0838. This could trigger a move into 1.0879.

Bearish Scenario

A sustained move under 1.0793 will signal the presence of sellers. The next target is the intraday low at 1.0785. This is a potential trigger point for an acceleration to the downside.