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

The Euro is trading slightly lower against the U.S. Dollar on Monday shortly after the U.S. opening. The market is trading inside Friday’s range, which typically indicates investor indecision and impending volatility.

Gains are being capped by last week’s dovish European Central Bank monetary policy statement that indicated policymakers are preparing to unleash fresh stimulus in an effort to revive the ailing Euro Zone economy.

Traders could also be positioning themselves ahead of Wednesday’s U.S. Federal Reserve monetary policy and interest rate decisions. A 25-basis point rate cut has already been cooked into the market, but traders want to know what the Fed will do in September and December.

At 11:17 GMT, the EUR/USD is trading 1.1118, down 0.0009 or -0.08%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, the closing price reversal bottom on July 25 at 1.1101 may be indicating a temporary shift in momentum.

A trade through 1.1101 will negate the closing price reversal bottom and signal a resumption of the downtrend. The daily chart indicates there is plenty of room to the downside under this support with the next target the May 11, 2017 main bottom at 1.10838.

A trade through 1.1188 will confirm the closing price reversal bottom. This could trigger a breakout to the upside.

The minor range is 1.1101 to 1.1188. Its 50% level or pivot at 1.1144 is controlling the direction of the market today.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Monday is likely to be determined by trader reaction to the pivot at 1.1144.

Bearish Scenario

A sustained move under 1.1144 will indicate the presence of sellers. It this creates enough downside momentum then look for a test of the closing price reversal bottom at 1.1101. Be careful selling weakness through this level because of the light volume.

Bullish Scenario

A sustained move over 1.1144 will signal the presence of buyers. If this creates enough upside momentum then look for a rally into the downtrending Gann angle at 1.1162. Since the trend is down, sellers could come in on the first test of this angle. If it’s taken out then look for the buying to possibly extend into the next downtrending Gann angle at 1.1173.