EUR/USD Mid-Session Technical Analysis for February 25, 2019

The Euro is trading higher on Monday on short-covering after U.S. President Trump said he will delay an increase in tariffs on Chinese goods, citing “protective” trade talks, and that he and Chinese President Xi Jinping would hold a summit to seal a deal. I’m calling it “short-covering” because recent economic data has suggested industrial downturns deepening in Europe, and this has been fueling recent selling pressure.

At 10:48 GMT, the EUR/USD is trading 1.1366, up 0.0031 or +0.28%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1371 will signal a resumption of the uptrend. A trade through 1.1234 will change the main trend to down.

If buyers take out 1.1371 then 1.1317 will become the new main bottom.

The short-term range is 1.1234 to 1.1371. Its retracement zone at 1.1303 to 1.1286 will become the primary downside target. Since the trend is up, buyers could come in on a test of this zone.

The main range is 1.1514 to 1.1234. Its retracement zone at 1.1374 to 1.1407 is the primary upside target. Sellers could come in on a test of this zone. The Euro could weaken if 1.1374 fails as support. The buying will strengthen on a sustained move over 1.1407.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the uptrending Gann angle at 1.1354.

Bullish Scenario

A sustained move over 1.1354 will indicate the presence of buyers. The next target is the main top at 1.1371, followed by the 50% level at 1.1374. The latter is a potential trigger point for an acceleration to the upside with 1.1407 the next potential upside target.

Bearish Scenario

A sustained move under 1.1354 will signal the presence of sellers. The first target is a downtrending Gann angle at 1.1344. This angle is a potential trigger point for an acceleration into a series of levels at 1.1317, 1.1303, 1.1294 and 1.1286.

The early rally is likely a reaction to the hopes of a U.S.-China trade deal. The buying could slow later in the session as investors take to the sidelines ahead of Fed Chair Powell’s Congressional testimony on Tuesday.