EUR/USD Mid-Session Technical Analysis for June 5, 2019

The Euro is trading slightly higher on Wednesday even after giving back most of its earlier gains. The single-currency was supported earlier in the session on rising expectations of a U.S. central bank interest rate cut in response to trade conflict-related risks.

On Tuesday, Federal Reserve Chairman Jerome Powell trigger a break in the U.S. Dollar after he dropped his standard reference to the central bank being “patient”, instead saying policymakers would respond as “as appropriate: to trade pressure.

Euro Zone strength is not driving the price action, but rather short-covering and position-squaring by investors who had previously bet on a stronger U.S. economy and steady U.S. interest rates.

Today’s sell-off may be investors betting the European Central Bank will match the Fed’s dovishness at its meeting on Thursday.

At 12:08 GMT, the EUR/USD is trading 1.1257, up 0.0005 or +0.04%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1289 will signal a resumption of the uptrend. The next target is the main top at 1.1324.

The main trend will change to down on a trade through 1.1116. This is unlikely, but the EUR/USD is inside the window of time for a potentially bearish closing price reversal top.

The main range is 1.1448 to 1.1107. Its retracement zone at 1.1278 to 1.1318 is resistance. It is also controlling the longer-term direction of the EUR/USD.

The major support is the Fibonacci level at 1.1185.

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 50% level at 1.1278.

Bullish Scenario

A sustained move over 1.1278 will indicate the presence of buyers. Overtaking the uptrending Gann angle at 1.1287 will put the EUR/USD in a bullish position with the next target angle dropping in at 1.1311, followed by a Fibonacci level at 1.1318. This level is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1278 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential break into the next uptrending Gann angle support at 1.1197.