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

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the Fib level at 1.1318.
James Hyerczyk

The Euro is trading lower against the U.S. Dollar on Wednesday, shortly after the release of the U.S. consumer inflation report and comments from European Central Bank President Mario Draghi earlier in the session. The currency is also trading lower after a rally through last week’s high failed to attract enough new buyers to extend the rally.

At 13:02 GMT, the EUR/USD is trading 1.1319, down 0.0007 or -0.06%.

Draghi helped put in the top early in the session when he expressed concerns over the effects of tariffs on the European economies. However, he did not talk about ECB monetary policies.

The EUR/USD is showing a limited reaction to a Labor Department report that showed U.S. consumer prices barely rose in May. The moderate inflation reading could increase pressure on the Federal Reserve to cut interest rates this year.

The CPI report said on Wednesday its consumer price index edged up 0.1% last month. Consumer prices gained 0.3% in April. In the 12 months through May, the CPI increased 1.8%, slowing from April’s 1.9% gain. Economists had forecast the CPI would rise 0.1% in May and 1.9% year-on-year.

The Core-CPI inched up 0.1% for the fourth straight month. In the 13 months through May, it rose 2.0% after advancing 2.1% in April.


Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out last week’s high at 1.1348. The main trend will change to down on a trade through 1.1204. However, the intraday price action suggests the EUR/USD may be forming a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day counter-trend sell-off.

The retracement zone at 1.1318 to 1.1278 continues to control the short-term direction of the EUR/USD. Today, the Forex pair is straddling the upper or Fibonacci level at 1.1318 for the fourth straight session. Holding above it will help sustain the current upside bias.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the Fib level at 1.1318.

Bullish Scenario

A sustained move over 1.1318 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of today’s high at 1.1348. Taking out this level could drive the EUR/USD into the long-term downtrending Gann angle at 1.1374.

Taking out 1.1374 could drive the Forex pair into the uptrending Gann angle at 1.1387. Crossing to the strong side of this angle will put the EUR/USD in a bullish position.

Bearish Scenario

A sustained move under 1.1318 will signal the presence of sellers. The first downside target is the downtrending Gann angle at 1.1299. Look for a further decline into the 50% level at 1.1278 if this angle fails as support.

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