EUR/USD Mid-Session Technical Analysis for February 5, 2020

The Euro is trading lower against the U.S. Dollar on Wednesday as traders shrugged off potentially friendly Euro Zone economic data, choosing instead to focus on expectations Beijing will manage to limit the spread of the deadly coronavirus.

IHS Markit’s final Euro Zone Composite Purchasing Manager’s Index (PMI), seen as a good indicator of economic health, rose to a five-month high of 51.3 in January from December’s 50.9. Traders were looking for unchanged.

At 11:21 GMT, the EUR/USD is trading 1.1016, down 0.0028 or -0.26%.

Later today, investors will get the opportunity to react to U.S. reports on ADP Non-Farm Employment Change, Trade Balance and ISM Non-Manufacturing PMI.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.0992 will reaffirm the downtrend. The main trend will change to up on a move through 1.1173.

The major retracement zone is 1.1059 to 1.1017. The EUR/USD is currently trading inside this zone. This zone is controlling the longer-term direction of the Forex pair.

The short-term range is 1.0992 to 1.1095. Its retracement zone at 1.1043 to 1.1031 is resistance.

The main range is 1.1173 to 1.0992. Its retracement zone at 1.1083 to 1.1104 is also resistance.

Daily Technical Forecast

Based on the early price action and the current price at 1.1016, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the support cluster at 1.1017.

Bearish Scenario

A sustained move under 1.1017 will indicate the presence of sellers. The next target is the uptrending Gann angle at 1.1005. This is the last potential support angle before the 1.0992 main bottom.

If 1.0992 fails then look for the selling to possibly extend into the longer-term uptrending Gann angle at 1.0990 and the November 29 main bottom at 1.0981.

Bullish Scenario

A sustained move over 1.1017 will signal the presence of buyers. This could lead to a labored rally with potential upside targets coming in at 1.1031, 1.1042 and 1.1043.