EUR/USD Mid-Session Technical Analysis for May 11, 2020

The Euro is trading lower against the U.S. Dollar on Monday on concerns that the reopening of economies in places such as Germany may have led to a pick-up in infection rate.

Coronavirus news is actually dominating the headlines. Some investors were reacting to the news of an easing of restrictions with Japan, New Zealand, France and the UK planning to lift lockdowns. Meanwhile, South Korea warned of a second wave of the virus as infections rebounded to a one-month high.

At 12:18 GMT, the EUR/USD is trading 1.0824, down 0.0015 or -0.13%.

“Developments in the Euro area keep Euro Zone equities and banks underperforming vs the rest of the world, which does not help the Euro,” Morgan Stanley analysts wrote in a note to clients.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 1.0727 will change the main trend to down. The uptrend will resume if buyers can take out 1.1018.

The minor trend is down. This is behind the momentum. A trade through 1.0876 will change the minor trend to up.

The main range is 1.0636 to 1.1147. Its retracement zone at 1.0892 to 1.0831 is controlling the near-term direction of the EUR/USD.

The minor range is 1.0766 to 1.0876. Its retracement zone at 1.0821 to 1.0808 is potential support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.0824, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the main Fibonacci level at 1.0831 and the minor Fibonacci level at 1.0808.

Bullish Scenario

A sustained move over 1.0831 will indicate the presence of buyers. This could create the upside momentum needed to challenge 1.0876 and 1.0892.

Bearish Scenario

A sustained move under 1.0808 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly continue into 1.0766.