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

The Euro tumbled along with government bond yields across the Euro Zone on Thursday after the European Central Bank steeped in with emergency stimulus measures to calm markets in the face of the coronavirus outbreak.

The ECB began new bond purchases worth 750 billion Euros at an emergency meeting late on Wednesday, in a bid to stop a pandemic-induced financial rout from shredding the Euro Zone’s economy.

At 10:41 GMT, the EUR/USD is trading 1.0804, down 0.0107 or -0.98%.

The new purchases bring this year’s planned purchases to 1.1 trillion Euros. The new purchases alone are worth 6% of the Euro area’s GDP.

Daily Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 1.0778 will reaffirm the downtrend. The next major downside target is the April 10, 2017 main bottom at 1.0569.

The main trend will change to up on a move through 1.1496. This is highly unlikely, but due to the prolonged move down in terms of price and time, traders should be watching for a closing price reversal bottom chart pattern. This pattern won’t change the trend, but it could trigger the start of a 2 to 3 day counter-trend rally.

The minor trend is down. This is generating the downside momentum. The minor trend will change to up on a move through the last minor top at 1.1237.

The short-term range is 1.0778 to 1.1496. Its retracement zone at 1.1052 to 1.1137 is the primary upside target. This zone is also resistance. Trading below this zone is contributing to the downside bias.

Daily Technical Forecast

Based on the early price action and the current price at 1.0804, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the steep downtrending Gann angle at 1.0856.

Bearish Scenario

A sustained move under 1.0856 will indicate the presence of sellers. If this creates enough downside momentum then look for sellers to make a run at the last main bottom at 1.0778.

Taking out 1.0778 will reaffirm the downtrend. This could trigger an acceleration to the downside with the next major downside target the April 10, 2017 main bottom at 1.0569.

Bullish Scenario

Overtaking and sustaining a rally over 1.0856 will signal the presence of buyers. This could lead to a test of the uptrending Gann angle at 1.0878.

A breakout over 1.0878 could trigger an acceleration to the upside with the next target angle 1.0978. This is the last potential resistance angle before the short-term Fibonacci level at 1.1052.