EUR/USD Mid-Session Technical Analysis for November 25, 2015

Daily EUR/USD Technical Analysis

The EUR/USD is trading sharply lower at the mid-session. The Forex pair plunged after Reuters reported that European Central Bank policy makers are looking at widening the scope of their bond buying or implementing a two-tier penalty charge on banks that leave cash with the ECB.

Technically, the main trend is down according to the daily swing chart. The downtrend was reaffirmed when the EUR/USD traded through the previous main bottom at 1.0592.

Based on the current price at 1.0582, the direction of the market the rest of the session is likely to be determined by trader reaction to the steep downtrending angle at 1.0602.

A sustained move under 1.0602 is likely to lead to further downside pressure. If the downside momentum continues then the selling may eventually extend into the April 13 main bottom at 1.0520 over the near-term.

A sustained move over 1.0602 will signal the presence of buying. It is likely to be short-covering, however. The nearest resistance over this level drops in at 1.0682.

Watch the price action and read the order flow at 1.0682. Trader reaction to this angle will tell us whether the selling is likely to continue or if short-covering will lead the market higher into today’s close.

2-Hour EUR/USD Technical Analysis

The main trend is down according to the 2-Hour EUR/USD chart. The trend turned down when the Forex pair crossed the last swing bottom at 1.0592. The new main top is 1.0689.

If the downside momentum continues then look for an eventual test of the April 13 bottom at 1.0520.

If a short-term range forms between 1.0689 and 1.0579 then look for a possible short-covering rally back to its 50% level or pivot at 1.0634. Since the main trend is down, sellers are likely to come in on a test of this level.