EUR/USD Mid-Session Technical Analysis for October 10, 2019

The Euro surged against the U.S. Dollar on Thursday as the prospects of a partial trade deal between the United States and China fueled appetite for trade-oriented currencies such as the Euro.

An overnight report that the U.S. is weighing a currency pact with China that could further delay next week’s planned tariffs against China is one of the catalysts pressuring the greenback. The other catalyst is yesterday’s Fed minutes which seem to be indicating policymakers are planning an additional rate cut at the end of October. As of Wednesday’s close, the financial markets were pricing in a 93.5% chance of a rate cut by the Fed.

At 12:28 GMT, the EUR/USD is trading 1.1026, up 0.0056 or +0.51%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through 1.1110. A move through 1.0879 will signal a resumption of the downtrend.

The minor trend is up. It changed to up when buyers took out 1.1001 earlier in the session. This shifted momentum to the upside. A trade through 1.0941 will change the minor trend to down.

The short-term range is 1.1110 to 1.0879. Its retracement zone is 1.0995 to 1.1022. This zone is controlling the near-term direction of the EUR/USD.

Daily Technical Forecast

Based on the early price action and the current price at 1.1026, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the price cluster at 1.1019 to 1.1022.

Bullish Scenario

A sustained move over 1.1022 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to take a run at the next downtrending Gann angle at 1.1063. This is followed by another minor top at 1.1076 and another downtrending Gann angle at 1.1082.

Bearish Scenario

A sustained move under 1.1019 will signal the presence of sellers. The first key downside target is the 50% level at 1.0995. This is a potential trigger point for an acceleration into the uptrending Gann angle at 1.1019.