EUR/USD Mid-Session Technical Analysis for January 6, 2020

The Euro is trading higher against the U.S. Dollar on Monday, and implied volatility gauges are relatively calm, which is surprising some traders because it suggests investors are not yet fleeing to add protection to their portfolios by buying currency options.

In economic news, morale among investors in the Euro Zone jumped for the third month in a row in January, buoyed by positive economic news from Asia and signs of an easing in U.S.-China trade tensions, a survey showed on Monday.

Euro Zone business activity remained close to stagnation at the end of last year, a survey showed on Monday, as an upturn in services activity only partially offset a continued decline in the bloc’s manufacturing industry.

Finally, Euro Zone producer prices fell in November for the fourth consecutive month but their drop was slower than in October and smaller than expected, official estimates showed on Monday.

At 12:56 GMT, the EUR/USD is trading 1.1199, up 0.0043 or +0.39%.

Daily Technical Analysis

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

The minor trend is down. The minor trend turned down on Friday. A trade through 1.1125 will reaffirm the downtrend. A trade though 1.1276 will change the main trend to up. This will also shift momentum to the upside.

On the upside, potential resistance is a pair of Fibonacci levels at 1.1185 and $1.1209. On the downside, potential support is a pair of 50% levels at 1.1146 and 1.1095.

Daily Technical Forecast

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

Bullish Scenario

A sustained move over 1.1185 will indicate the presence of buyers. The first upside target is 1.1209. Overtaking this level will indicate the buying is getting stronger with the next target a potential resistance cluster at 1.1239 to 1.1241.

Bearish Scenario

A sustained move under 1.1185 will signal the presence of sellers. The daily chart indicates the possibility of a steep break with potential targets 1.1146, 1.1125 and 1.1111.