EUR/USD Mid-Session Technical Analysis for November 13, 2018
The EUR/USD is trading higher on Tuesday as investors take a breather after yesterday’s steep sell-off. Traders are also squaring positions while they wait for an answer from the European Union regarding Italy’s resubmission of its 2019 budget.
Tensions have been simmering for months between Brussels and Rome. Last month the EU rejected Italy’s budget and asked the government to rework the budget to close the proposed deficit. Today, Italy is expected to deliver revised numbers. The progress of Brexit talks with the European Union has also been another source of uncertainty for the Euro.
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At 1433 GMT, the EUR/USD is trading 1.1260, up 0.0016 or +0.14%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1216 will signal a resumption of the downtrend. This could lead to a test of the Fibonacci level at 1.1185.
The nearest upside target is the former bottom at 1.1301. Overcoming this level will indicate the short-covering is getting stronger.
If a short-term range forms between 1.1501 to 1.1216 then its retracement zone at 1.1359 to 1.1392 will become the primary upside target.
Daily Technical Forecast
The market is currently in a holding pattern because investors are waiting for news about Italy’s budget and the Brexit negotiations. If these events continue to cast a negative pall on the Euro then look for sellers to drive the EUR/USD into 1.1185.
If these events turn out to be positive then look for a short-covering rally. The first upside target is 1.1301. This is followed by a steep downtrending Gann angle at 1.1341. Since the trend is down, look for sellers on the first test of these levels. If the buying is strong enough to overcome the angle then look for the rally to extend into the retracement zone at 1.1359 to 1.1392.
We’re in a news driven market so don’t be surprised by heightened volatility.