EUR/USD Mid-Session Technical Analysis for November 5, 2018

The Euro is trading lower shortly after the U.S. opening on Monday. While most Forex pairs appear to be treading water ahead of Tuesday’s U.S. mid-term elections, Euro traders are responding to actual news. Friday’s U.S. jobs data highlighted the diverging trend between a robust U.S. economy and the struggling European economy.

At 1230 GMT, the EUR/USD is trading 1.1367, down 0.0020 or -0.18%.

Last week, some European Central Bank policymakers raised hopes that the ECB could extend a new set of long-term loans to the bank sector. Policymakers said that new targeted long-term refinancing operations are an option that may be considered in due time. This news along with weaker economic data raises downside risk to the Euro.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1301 will signal a resumption of the downtrend. The main trend will change to up on a move through 1.1555.

The minor trend is also down. Friday’s minor closing price reversal top indicates the selling is greater than the buying at current price levels. Taking out Friday’s low earlier today makes 1.1458 a new minor top. A trade through this top will change the minor trend to up. It will also shift momentum to the upside.

The short-term range is 1.1302 to 1.1458. The Euro is currently testing its retracement zone at 1.1380 to 1.1361. Aggressive counter-trend buyers may step in to try to form a secondary higher bottom. Sellers are going to try to drive the market through this zone.

The intermediate range is 1.1555 to 1.1302. Its retracement zone at 1.1428 to 1.1458 stopped the rally last week at 1.1458.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 1.1380.

A sustained move over 1.1380 will indicate the presence of buyers. If this move creates enough upside momentum, we could see a retest of 1.1428 to 1.1458. Taking out the latter could trigger a further rally into the longer-term Fibonacci level at 1.1498.

A sustained move under 1.1380 will signal the presence of sellers. This is followed by the short-term Fibonacci level at 1.1361. This price is a potential trigger point for an acceleration to the downside with 1.1301 the primary downside target.