EUR/USD Mid-Session Technical Analysis for January 29, 2019

The Euro is trading higher on Tuesday shortly before the U.S. opening, but giving back about half of its earlier gains. The longer-term picture is bearish for the single-currency because of the weakening Euro Zone economy, which is delaying its first interest rate hike in years.

However, the Euro is enjoying a short-term rally because last week’s dovish stance by European Central Bank President Mario Draghi was fully-priced into the market. Furthermore, traders are anticipating the Fed to be dovish on Wednesday when it releases its interest rate decision and monetary policy statement. This is helping to weaken the U.S. Dollar.

At 1128 GMT, the EUR/USD is trading 1.1432, up 0.0006 or +0.05%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend changes to up on a trade through 1.1570. A move through 1.1289 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. The next target is the minor top at 1.1490.

The main range is 1.1570 to 1.1289. The EUR/USD is currently trading inside its retracement zone at 1.1429 to 1.1463. This zone is controlling the near-term direction of the Forex pair.

On the upside, the major resistance is a 50% level at 1.1516. On the downside, the minor 50% support is 1.1370.

Daily Technical Forecast

Based on the early price action and the current price at 1.1432, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1429.

Bullish Scenario

A sustained move over 1.1429 will indicate the presence of buyers. The first target angle comes in at 1.1440. Overcoming this angle will indicate the buying is getting stronger. This could trigger a further rally into the Fibonacci level at 1.1463.

The trigger point for an acceleration to the upside is 1.1463. Taking out this level with conviction could trigger a surge into the minor top at 1.1490, followed by a downtrending Gann angle at 1.1505.

Bearish Scenario

The inability to sustain the early rally over 1.1440 is the first sign of sellers. This could be expected because the main trend is down. A sustained move under 1.1429 could drive the EUR/USD into the uptrending Gann angle at 1.1409.

Taking out 1.1409 could trigger an acceleration to the downside with the next target 1.1370 then an uptrending Gann angle at 1.1349.