EUR/USD Mid-Session Technical Analysis for September 23, 2019

Based on the early price action and the current price at 1.0989, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the price cluster at 1.0997.
James Hyerczyk
EUR/USD

The Euro is trading lower on Monday after plunging to its lowest level since its last major bottom on September 12. The catalyst behind the selling pressure are Euro Zone reports showing weaker-than-expected Flash Manufacturing and Services PMI data. The news suggests Germany may be heading for recession and the European Central Bank (ECB) may be forced to cut interest rates again. Furthermore, it increases the chances of fiscal stimulus from the German government.

At 12:53 GMT, the EUR/USD is trading 1.0989, down 0.0031 or -0.28%.

Traders will also get the chance to react to a speech from outgoing ECB President Mario Draghi at 13:00 GMT. At 13:45 GMT, the U.S. will release Flash Manufacturing PMI and Flash Services PMI. They are expected to come in at 50.3 and 51.5 respectively. Lower-than-expected numbers could help the EUR/USD recover some of its earlier losses.

Daily EUR/USD

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 1.0927 will change the main trend to down. The uptrend will resume on a move through 1.1110.

The minor trend is down. It turned down earlier on Monday when sellers took out 1.0990. This shifted momentum to the downside. A trade through 1.1076 will change the minor trend to up.

The short-term range is 1.0927 to 1.1110. Its retracement zone at 1.0997 to 1.1019 is potential resistance.

The main resistance is the retracement zone at 1.1045 to 1.1073.

Daily Technical Forecast

Based on the early price action and the current price at 1.0989, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the price cluster at 1.0997.

Bearish Scenario

A sustained move under 1.0997 will indicate the presence of sellers. If this move creates enough downside momentum then look for a retest of today’s low at 1.0966, followed by an uptrending Gann angle at 1.0962. If this fails then look for the selling to extend into the next uptrending Gann angle at 1.0945. This is the last potential support angle before the 1.0927 main bottom.

Bullish Scenario

Overtaking 1.0997 will signal the presence of buyers. This could trigger a surge into the short-term 50% level at 1.1019. If sellers don’t stop the move then the rally could extend into the main 50% level at 1.1045.

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