EUR/USD Mid-Session Technical Analysis for June 12, 2020

The Euro is trading nearly flat on Friday, supported by a slight recovery in demand for risky assets. Most of the price action is likely position-squaring ahead of the weekend, probably due to the uncertainty surrounding the stock market and the impact of a potential second-wave of COVID-19 cases in the United States.

At 11:01 GMT, the EUR/USD is trading 1.1298, down 0.0002 or -0.02%.

In economic news, Euro Zone industrial output fell the most on record in April as coronavirus lockdowns halted activity across the region, data showed on Friday, marking the low point of the pandemic-induced contraction.

The European Union’s statistics office, Eurostat, said industrial output in the 19 countries sharing the Euro fell 17.1% month-on-month for a 28.0% year-on-year drop, the steepest declines since records began in 1991. Economists polled by Reuters had expected a 20.0% monthly and 29.5% annual decline.

“We see this as the bottom of this crisis, with industrial production standing 73% below February values. May should see a strong bounce, but the pace of recovery after that is more certain,” said Jacob Nell, economist at Morgan Stanley bank.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1422 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.1240.

The minor range is 1.1240 to 1.1422. Its 50% level or pivot at 1.1331 is controlling the direction of the EUR/USD on Friday.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1167 to 1.1066 is the next major support zone.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1298, the direction of the EUR/USD the rest of the session on Friday is likely to be determined by trader reaction to the pivot at 1.1331.

Bearish Scenario

A sustained move under 1.1331 will indicate the presence of sellers. If this move creates enough downside pressure then look for a test of 1.1240. Taking out this bottom will change the main trend to down. This could trigger a break into 1.1167.

Bullish Scenario

A sustained move over 1.1331 will signal the presence of buyers. If this creates enough upside momentum then look for a possible retest of 1.1422.

Side Notes

We could see a volatile, two-sided trade until investors figure out whether risk is on or risk is off. Right now, given the changing conditions, it’s a toss-up.