EUR/USD Mid-Session Technical Analysis for June 6, 2019

The Euro is surging on Thursday after the European Central Bank (ECB) held interest rates steady and as pressure mounted on central bank policymakers to announce fresh stimulus measures. The ECB said interest rates on its marginal lending facility and deposit facility would remain unchanged at 0%, 0.25% and -0.40%, respectively.

Traders are now hoping for ECB President Mario Draghi to signal fresh stimulus measures and monetary support before his term expires in October.

The Euro hit its session high against the U.S. Dollar after the ECB said it would delay its first post-crisis interest rate hike until at least the middle of next year. Additionally, Draghi also offered to pay banks if they borrow cash from the central bank and pass it on to households and firms.

At 12:06 GMT, the EUR/USD is trading 1.1262, up 0.0042 or +0.37%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top and today’s confirmation of the chart pattern shifted momentum to the downside.

A trade through 1.1305 will negate the closing price reversal top and signal a resumption of the uptrend. This could lead to a test of the next main top at 1.1324.

The main trend will change to down on a trade through 1.1116, followed by 1.1107.

The main range is 1.1448 to 1.1107. Its retracement zone at 1.1278 to 1.1318 is controlling the longer-term direction of the EUR/USD. Yesterday’s high at 1.1305 was formed inside this zone.

The short-term range is 1.1107 to 1.1305. Its retracement zone at 1.1206 to 1.1183 is support. Earlier today, the selling stopped at the 50% level at 1.1204.

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 buying is getting stronger. This could trigger a surge into the price cluster at 1.1305 to 1.1308. Taking out this area should lead to a test of the Fibonacci level at 1.1318, followed by the main top at 1.1324. This is a potential trigger point for an acceleration into the next downtrending Gann angle at 1.1378. This is the last potential resistance angle before the 1.1448 main top.

Bearish Scenario

The inability to sustain a rally over 1.1278 will signal the presence of sellers. If this creates enough downside momentum then look for a possible retest of the support cluster at 1.1207 to 1.1206. This area essentially stopped the selling earlier in the session.

If 1.1206 fails as support then look for the selling to possibly extend into the major Fib level at 1.1185 and the short-term Fib at 1.1183.