EUR/USD Mid-Session Technical Analysis for May 15, 2020

The Euro is edging higher on Friday despite the release of a report that showed the Euro Zone economy posted its deepest contraction on record in the first three months of the year against the previous quarter. The price action suggests that the markets had expected the bad news, which were a consequence of the lockdowns introduced in March to slow the coronavirus pandemic.

At 10:35 GMT, the EUR/USD is trading 1.0810, up 0.0009 or +0.09%.

The European Union’s statistics office Eurostat said in a flash estimate that the gross domestic product of the 19 countries sharing the Euro contracted 3.8% quarter-on-quarter for a 3.2% year-on-year fall, as expected by economists.

Eurostat said this was the sharpest quarterly decline since time series started in 1995. Year-on-year, the fall was the sharpest since the third quarter of 2009 when Euro Zone output shrank 4.5%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 1.0766 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through 1.0897 will change the minor trend to up. This will shift momentum back to the upside.

The main range is 1.0636 to 1.1147. Its retracement zone at 1.0831 to 1.0892 is controlling the near-term direction of the Forex pair. This zone is also resistance today.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.0810, the direction of the EUR/USD the rest of the session on Friday is likely to be determined by trader reaction to the Fibonacci level at 1.0831.

Bullish Scenario

A sustained move over 1.0831 will indicate the presence of buyers. If this move is able to create enough upside momentum then look for a near-term rally into 1.0892 to 1.0897.

Bearish Scenario

A sustained move under 1.0831 will signal the presence of sellers. This could lead to a near-term test of 1.0766. Taking out this main bottom will likely lead to a test of the next main bottom at 1.0727. This is a potential trigger point for an acceleration to the downside.