EUR/USD Mid-Session Technical Analysis for June 19, 2020

The Euro is trading lower against the U.S. Dollar at the mid-session on Friday, and in a position to post about a 1% loss for the week on doubts whether its coronavirus recovery fund can be realized.

Traders are placing their focus on a European Union summit at which bloc leaders will try to navigate regional divisions over a 750 billion Euro ($840.8 billion) coronavirus recovery fund.

At 16:35 GMT, the EUR/USD is trading 1.1193, down 0.0012 or -0.11%.

Traders are also focusing on an uptick in coronavirus cases in many U.S. states this week and new infections detected in Beijing, raising fears of a return to global lockdowns.

“Even if we do not see a ‘second wave’, a renewed rise in infection numbers illustrates that things are not going to return to normal for a long time,” Commerzbank analysts said in their morning note.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Friday when sellers took out yesterday’s low. A trade through 1.1422 will change the main trend to up.

The EUR/USD is down seven sessions from its last main top which means we should start watching for a closing price reversal bottom. This chart pattern won’t change the main trend to up, but it could lead to a 2 to 3 day counter-trend rally.

The minor range is 1.1422 to 1.1168.Its 50% level or pivot at 1.1295 is the nearest position.

The short-term range is 1.0871 to 1.1422. Its retracement zone at 1.1146 to 1.1082 is the first downside target.

The main range is 1.0636 to 1.1422. Its retracement zone at 1.1027 to 1.0935 is the second downside target.

Daily Swing Chart Technical Forecast

The downside momentum indicates that traders are probably targeting the 50% level at 1.1146. Look for a technical bounce on the first test of this level. If it fails then look for an acceleration into the short-term Fibonacci level at 1.1082.

On the upside, the first target is Thursday’s close at 1.1206. Closing over this level will create a closing price reversal bottom. If confirmed, this could lead to a 2 to 3 day counter-trend rally.

Essentially, the key level to watch is 1.1206. Look for a downside bias under this level, look for an upside bias to develop on a sustained move over this level.

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