EUR/USD Mid-Session Technical Analysis for January 2, 2020

The Euro is trading lower on Thursday although final purchasing managers indexes painted a slightly brighter than expected picture across much of Europe, with final French, German and Euro Zone readings a touch better than advance PMIs. However, they confirmed Euro Zone activity contracting for the 11^th straight month.

The Euro strengthened 1.8% to the dollar last month but the PMIs failed to lift it further even though bond yields extended their rise and inflation expectations rose to the highest since July.

At 12:40 GMT, the EUR/USD is trading 1.1194, down 0.0068 or -0.60%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1313 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.1067.

The minor trend is also up. A trade through 1.1159 will change the minor trend to down. This will shift momentum to the downside.

The EUR/USD appears to be headed into layers of retracement levels, where it could bounce around as traders try to establish support and resistance.

Based on the current price at 1.1194, the nearest resistance is 1.1209. On the downside, potential support comes in at 1.1185, 1.1146, 1.1095 and 1.1044.

The long-term level to watch is the Fibonacci level at 1.1185. Traders should also note that the chart starts to open up to the downside under 1.1146, 1.1095 and 1.1044.

Daily Technical Forecast

Based on the early price action and the current price at 1.1194, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to 1.1185.

Bullish Scenario

A sustained move over 1.1185 will signal the presence of buyers. This could trigger a labored rally with potential upside targets a Fib level at 1.1209, an uptrending Gann angle at 1.1221 and a downtrending Gann angle at 1.1241. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1185 will indicate the presence of sellers. The first two potential downside targets are a minor bottom at 1.1159 and a 50% level at 1.1146.

Taking out 1.1146 could trigger a further break into an uptrending Gann angle at 1.1101, followed closely by a 50% level at 1.1095.