EUR/USD Mid-Session Technical Analysis for July 12, 2019

The Euro is trading nearly flat against the U.S. Dollar on Friday, shortly after the U.S. opening. Helping to keep a lid on prices is yesterday’s better-than-expected U.S. consumer inflation report that tempered the need for a 50-basis point rate cut by the Fed later in the month. Traders are still pricing in a 25-basis point rate cut. Later today at 12:30 GMT, the U.S. government will release data on producer price inflation.

At 11:49 GMT, the EUR/USD is trading 1.1256, up 0.0001 or +0.01%.

Earlier today, European Central Bank Governing Council Member Ignazio Visco said the ECB will need to adopt further expansionary measures if the Euro Zone does not pick up, and it will consider its options “in coming weeks.”

In a keynote speech in Milan, the Bank of Italy Governor said that “in the coming weeks the ECB will continue to assess how to adjust the instruments at its disposal” in the face of weak growth and low inflation expectations.

Visco’s remarks are potentially bearish because they seem to be indicating the ECB will ease policy at its next meeting on July 25 or in September.

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 was formed at 1.1413 on June 25.

A trade through 1.1193 will change the main trend to down. This could lead to a quick test of the next main bottom at 1.1181. This is the last potential support before the 1.1116 and 1.1107 main bottoms.

On the downside, the nearest support is a long-term Fibonacci level at 1.1185.

On the upside, resistance is a series of retracement levels at 1.1270, 1.1278 and 1.1297. On Thursday, the rally stopped at 1.1286, inside this area.

Daily Technical Forecast

Based on the early price action and the current price at 1.1256, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the uptrending Gann angle at 1.1253.

Bearish Scenario

A sustained move under 1.1253 will indicate the presence of sellers. This could trigger a sharp break into the next uptrending Gann angle at 1.1223.

Bullish Scenario

A sustained move over 1.1253 will signal the presence of buyers. Look for a labored rally with a cluster of resistance coming in at 1.1270, 1.1278, 1.1283 and 1.1286. The EUR/USD will begin to open up to the upside over 1.1297 and 1.1318.