EUR/USD Mid-Session Technical Analysis for May 17, 2019

The Euro is clawing back some of this week’s losses on Friday. Profit-taking and position-squaring could be behind the move. The single-currency is set to finish lower for the week, nonetheless. This week, the Euro has been pressured by better-than expected U.S. economic data, U.S.-China trade hostilities and worries over European Parliament elections.

The biggest damage to the currency was likely generated by comments from Italian Deputy Prime Minister Matteo Salvini. He said on Thursday that he would “tear apart” EU budget rules that were “strangling” Italy if his party did well in the elections.

At 12:51 GMT, the EUR/USD is trading 1.1177, up 0.0004 or +0.04%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1265 will change the main trend to up. A move through 1.1135 will confirm the downtrend and likely lead to a test of previous main bottoms at 1.1112 and 1.1109.

The key level to watch today is the major Fibonacci level at 1.1185. This level is controlling the longer-term direction of the EUR/USD.

The next retracement zone resistance is 1.1218 to 1.1243.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Friday is likely to be determined by trader reaction to the price cluster at 1.1184, 1.1185 and 1.1187. So far, this area is holding as resistance.

Bearish Scenario

A sustained move under 1.1184 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into today’s intraday low at 1.1158, followed by an uptrending Gann angle at 1.1150.

The angle at 1.1150 is the last potential support angle before the 1.1135 main bottom.

Bullish Scenario

Overtaking and sustaining a rally over 1.1187 will signal the presence of buyers. The daily chart indicates there is room to the upside to rally so investors should watch for a potential acceleration over this level. Potential targets include a 50% level at 1.1218 and a downtrending Gann angle at 1.1224.