EUR/USD Mid-Session Technical Analysis for June 27, 2019

The Euro is edging higher on Thursday on position-squaring ahead of a few key U.S. reports including Final GDP, Weekly Unemployment Claims and Pending Home Sales. Gains are being limited by rising U.S. Treasury yields and the slightly hawkish tone from Federal Reserve officials earlier in the week that reduced the chances of a 50 basis point rate cut by the central bank in late July.

At 11:06 GMT, the EUR/USD is trading 1.1375, up 0.0007 or +0.05%.

Earlier in the session, Spanish Flash CPI came in lower than expected at 0.4%. Italian 10-year Bonds yielded 2.09 percent after the auction, down from 2.60 percent. Later today, Germany Preliminary CPI will be released. Traders are looking for a rise of 0.2%.

U.S. Final GDP is scheduled to be released at 12:30 GMT. Traders are looking for 3.1%. Weekly Unemployment Claims are forecast to rise to 220K and Pending Home Sales could come in 1.1% higher.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, upside momentum has slowed since the formation of a potentially bearish closing price reversal top at 1.1413 on June 25.

A trade through 1.1413 will negate the closing price reversal top. This will also signal a resumption of the uptrend with the March 21 top at 1.1448 the next likely upside target.

Taking out 1.1344 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction with the short-term retracement zone at 1.1297 to 1.1270 the next likely downside target.

The main retracement zone is 1.1318 to 1.1278. This zone is controlling the near-term direction of the EUR/USD.

Tuesday’s closing price reversal top created a range between 1.1413 and 1.1344. Its 50% level or pivot is 1.1379. The EUR/USD has been straddling this level for two sessions.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the 50% level at 1.1379.

Bullish Scenario

A sustained move over 1.1379 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the long-term downtrending Gann angle at 1.1404. This is followed by the top at 1.1413.

Taking out 1.1413 could trigger an acceleration to the upside with 1.1448 the next major upside target.

Bearish Scenario

A sustained move under 1.1379 will signal the presence of sellers. The first downside target is a downtrending Gann angle at 1.1359. This is followed by at low at 1.1344.

Taking out 1.1344 will confirm the closing price reversal top. This could trigger a break into the uptrending Gann angle at 1.1321. Look for a technical bounce on the first test of this Gann angle.

If 1.1321 fails as support then look for the selling to extend into the main Fibonacci level at 1.1318, followed by the short-term 50% level at 1.1297.