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James Hyerczyk

The Euro is trading slightly lower against the U.S. Dollar shortly before the U.S. opening. Concerns over U.S.-China trade talk progress is driving investors into the safety of the greenback. The single-currency barely moved after Germany Preliminary GDP came in at 0.1%, higher than the -0.1% forecast. French CPI also improved to 0.0%, meeting the forecast.

At 11:00 GMT, the EUR/USD is trading 1.0999, down 0.0009 or -0.07%.

The good news may have been offset by Euro Zone Flash Employment Change that came in at 0.1%, lower than the forecast and the previously reported 0.2%. Euro Zone Flash GDP was reported at 0.2%, matching the estimate and previous read.

On Wednesday, the U.S. Consumer Price Index rose 0.4%, better than the 0.3% forecast. Core CPI rose 0.2%, matching the forecast. Also on Wednesday, Federal Reserve Chairman Jerome Powell said the central bank is unlikely to move on interest rates given the “sustained” economic expansion.

Later today, the U.S. will release a report on Producer Price inflation. It is expected to have risen 0.3%. Core PPI is expected to come in at 0.2%. Weekly Unemployment Claims are expected to come in at 215K. Fed Chair Powell also concludes a second day of Congressional testimony.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through 1.1176. This is highly unlikely. However, the EUR/USD is down 10 sessions since its last main top so traders should be on alert for a closing price reversal bottom.

The minor trend is also down. Taking out the last minor bottom at 1.0991 will reaffirmed the downtrend.

The main range is 1.0879 to 1.1179. Its retracement zone is 1.1029 to 1.0994. The market is currently testing the lower or Fibonacci level of this range. This zone is controlling the near-term direction of the EUR/USD so if 1.0994 fails as support then the downside pressure could increase.


Daily Technical Forecast

Based on the early price action and the current price at 1.0999, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to yesterday’s close at 1.1007.

Bearish Scenario

A sustained move under 1.1007 will indicate the presence of sellers. Taking out the Fibonacci level at 1.0994 and the minor bottom at 1.0991 will indicate the selling is getting stronger. This could lead to a test of the downtrending Gann angle at 1.0976.

Crossing to the weak side of the downtrending Gann angle at 1.0976 will put the EUR/USD in a weak position with the uptrending Gann angle at 1.0959 the next likely downside target.

Bullish Scenario

A sustained move over 1.1007 will signal the presence of buyers. This could trigger a short-covering rally into the main 50% level at 1.1029, followed closely by an uptrending Gann angle at 1.1039. This is a potential trigger point for an acceleration to the upside.

Side Notes

A close over 1.1007 will also form a closing price reversal bottom. If confirmed on Friday, this could trigger the start of a 2 to 3 day counter-trend rally.

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