EUR/USD Mid-Session Technical Analysis for September 3, 2019

The Euro continues to plunge on Tuesday, touching a 28-month low against the U.S. Dollar on expectations the European Central Bank (ECB) will push its benchmark rate further into negative territory, while giving the economy another dose of quantitative easing.

Currently, money market traders are pricing in an 83% chance that ECB policymakers will cut its benchmark rate by 20 basis points when it meets on September 12. It now stands at minus 0.40%.

At 12:33 GMT, the EUR/USD is trading 1.0940, down 0.0029 or -0.27%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out Monday’s low. The main trend will change to up on a move through 1.1164. However, this is highly unlikely.

The EUR/USD is down six days from its last main top. On Wednesday, the single currency will be inside the window of time for a closing price reversal bottom. So we’re expecting the selling to continue over the short-run until at least tomorrow when we could start to see profit-taking or position-squaring.

On the upside, the nearest resistance is the former main bottom at 1.1027. On the downside, the next major target is the May 11, 2017 main bottom at 1.0838.

Daily Technical Forecast

Based on the early price action and the current price at 1.0926, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the steep downtrending Gann angle at 1.0924.

Bearish Scenario

A sustained move under 1.0924 will indicate the selling pressure is getting stronger. If this move creates enough downside momentum then look for the selling to continue into another downtrending Gann angle at 1.0850, followed by the May 11, 2017 main bottom at 1.0838.

Bullish Scenario

A sustained move over 1.0924 will not signal the presence of buyers per se, but it will likely be an indication that sellers have lightened up on the short side.

There is room to rally to 1.1027 and a downtrending Gann angle at 1.1044, but there is going to have to be a major shift in the fundamentals to trigger a rally of that size into the nearest resistance.