EUR/USD Mid-Session Technical Analysis for January 25, 2019
The Euro is trading higher on Friday as it appears yesterday’s decision by the European Central Bank to hold interest rates steady and ECB President Mario Draghi’s dovish remarks had already been priced into the market, turning it into a “sell the rumor, buy the fact” situation. Despite today’s strength, the weakening Euro Zone economy and the postponement of an interest rate hike until December or later should limit the Euro’s upside potential, while increasing the odds of further weakness.
At 1245 GMT, the EUR/USD is trading 1.1343, up 0.0036 or +0.33%.
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Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1289 will signal a resumption of the downtrend with the next target the December 14 main bottom at 1.1270. We could see a technical bounce on the first test of this level, but if it fails then look for a potential acceleration to the downside with the November 12 bottom at 1.1216 the next likely downside target.
The minor trend is also down. A trade through 1.1395 will change the minor trend to up. This will also shift momentum to the upside.
The main range is 1.1570 to 1.1289. If the minor trend changes to up then look for the rally to possibly extend into its retracement zone at 1.1429 to 1.1463.
Daily Swing Chart Technical Forecast
The EUR/USD is trading inside yesterday’s range which suggests investor indecision and impending volatility. It could also be indicating a short-term transition is taking place following an eleven session break from its last main top. This means we could see a couple of days of counter-trend trading or even a change in the minor trend. However, gains are likely to be limited by former minor tops and the 50% level at 1.1429.
Taking out 1.1289 will indicate that sellers have returned after a short-term reprieve. This could trigger the resumption of the break with 1.1270 the first target.