EUR/USD Mid-Session Technical Analysis for January 29, 2020

The Euro is trading lower against the U.S. Dollar as investors shift their focus to U.S. monetary policy and the direction of interest rates. At 19:00 GMT, the U.S. Federal Reserve will conclude its latest policy meeting with interest rates almost certainly to remain on hold but officials likely to discuss possible changes on how they manage the U.S. central bank’s key overnight borrowing rate.

At 12:57 GMT, the EUR/USD is trading 1.0998, down 0.0024 or -0.22%.

Early Wednesday, investors will get the opportunity to react to the latest data from the U.S. Goods Trade Balance report, Preliminary Wholesale Inventories and Pending Home Sales.

Since the Fed cut rates in October, its third and final reduction in borrowing costs in 2019, policymakers have agreed to keep their target policy rate in the current range of 1.50% and 1.75% until there is some significant change in the economic outlook.

While investors have increased bets the Fed would cut rates again at some point this year, analysts still were near unanimous that any such decision is months down the road.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Wednesday when sellers took out yesterday’s closing price reversal bottom. The next downside target is the November 29 bottom at 1.0981.

The minor trend is also down. A trade through 1.1028 will change the minor trend to up. This will also shift momentum to the upside.

The main range is 1.0879 to 1.1239. The market is currently trading on the weak side of its retracement zone at 1.1017 to 1.1059. This is helping to generate the downside bias.

Daily Technical Forecast

Based on the early price action and the current price at 1.0998, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 1.0993.

Bearish Scenario

A sustained move under 1.0993 will indicate the selling pressure is getting stronger. This could lead to a test of an uptrending Gann angle at 1.0984 and the main bottom at 1.0981.

Taking out 1.0981 could trigger an acceleration to the downside with the next target angle coming in at 1.0932. This is the last potential support angle before the 1.0879 main bottom.

Bullish Scenario

A sustained move over 1.0993 will indicate that buyers are coming in to slow down the selling pressure. The first upside target is the Fibonacci level at 1.1017. Overcoming 1.1022 will turn the EUR/USD higher for the session. This will put the Forex pair in a position to post a closing price reversal bottom.