EUR/USD Mid-Session Technical Analysis for January 23, 2019

The Euro is trading slightly better on Wednesday, shortly before the U.S. opening as investors strike a cautious chord ahead of tomorrow’s European Central Bank monetary policy announcement and interest rate decision. The inside move on the daily chart suggests investor indecision and impending volatility.

Ahead of the ECB meeting, traders are expecting central bank policymakers to take a cautious view on growth given the dovish outlook for global growth, which is a threat to the Euro Zone economy.

At 1200 GMT, the EUR/USD is trading 1.1363, up 0.0004 or +0.04%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the closing price reversal top at 1.1570 on January 10.

A trade through 1.1309 will change the main trend to down. The Euro is far from reaffirming the uptrend, but today is the ninth session down from the 1.1570 main top which puts it in the window of time for a potentially bullish closing price reversal bottom.

The minor trend is down. This is contributing to the downside momentum. A trade through 1.1413 will change the minor trend to up. This will shift momentum to the upside.

Daily Technical Forecast

Based on the early price action and the current price at 1.1363, the direction of the EUR/USD on Wednesday will be determined by trader reaction to the uptrending Gann angle at 1.1344. This angle was tested successfully on Tuesday.

Bullish Scenario

A sustained move over 1.1344 will indicate the presence of buyers. If this can generate enough upside momentum, we could see a drive into the uptrending Gann angle at 1.1379. Overcoming this angle could drive the EUR/USD into a downtrending Gann angle at 1.1390. This angle has been controlling the direction of the Forex pair since January 10.

We could see a technical bounce on the first test of the downtrending angle at 1.1390. However, overtaking it could trigger a surge into the Fibonacci level at 1.1409.

Bearish Scenario

The inability to overcome 1.1379 will signal the presence of sellers. This could drive the EUR/USD into the next uptrending Gann angle at 1.1344. If momentum is strong enough to take out this angle, sellers should also break through yesterday’s low at 1.1336 with the selling extending into the main bottom at 1.1309.