EUR/USD Mid-Session Technical Analysis for July 31, 2019

The Euro is trading slightly lower on Wednesday as investors await the release of the U.S. Federal Reserve’s monetary policy statement and interest rate decision. The Fed is widely expected to cut its benchmark interest rate 25-basis points. However, traders will be more interested in the guidance offered during Fed Chairman Powell’s press conference.

At 13:21 GMT, the EUR/USD is trading 1.1149, down 0.0007 or -0.06%.

Investors want to know if the July cut is a one-time deal, or the start of a new interest rate cutting cycle. Look for the Euro to rally if the Fed signals additional rate cuts for September and December. Ultimately, the direction of the EUR/USD today will be determined by the direction of U.S. Treasury yields. If yields go down then this will signal the Fed didn’t do enough. If yields go up then this will indicate central bank policymakers made the right decisions.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending a little higher since the formation of the closing price reversal bottom on July 25 at 1.1101.

A trade through 1.1101 will negate the closing price reversal bottom and signal a resumption of the downtrend. A move through 1.1188 will confirm the closing price reversal bottom. The main trend will change to up on a trade through 1.1282.

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

The first upside target is the long-term Fibonacci level at 1.1144.

The main range is 1.1413 to 1.1101. Its retracement zone at 1.1257 to 1.1294 is the major upside target.

Daily Technical Forecast

Based on the early price action and the current price at 1.1149, the direction of the EUR/USD is likely to be determined by trader reaction to the pivot at 1.1144 and the downtrending Gann angle at 1.1153.

Bullish Scenario

A sustained move over 1.1153 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the Fib level at 1.1185, followed by the downtrending Gann angle at 1.1202. This is another trigger point for an acceleration into a downtrending Gann angle at 1.1242.

Bearish Scenario

A sustained move under 1.1144 will signal the presence of sellers. The first target is a downtrending Gann angle at 1.1122. Crossing to the weak side of this angle could trigger an acceleration into the bottom at 1.1101. Look for a potential acceleration to the downside if this bottom is taken out with conviction.