The Euro is plunging on Thursday and trading at its lowest level since April 10 after weak Euro Zone PMI data raised concerns about an economic slowdown ahead of the long Easter holiday week-end. Renewed concerns over the economy were fueled after a report showed activity in Germany’s manufacturing sector shrank for a fourth straight month in April.
At 12:31 GMT, the EUR/USD is trading 1.1241, down 0.0056 or -0.51%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, today’s steep sell-off is threatening to shift momentum to the downside. A trade through 1.1324 will signal a resumption of the uptrend. A move through 1.1184 will change the main trend to down.
The minor trend is also up. A trade through 1.1230 will change the minor trend to down. This will also shift momentum to the downside.
The main range is 1.1448 to 1.1184. Its retracement zone at 1.1316 to 1.1347 is resistance. This zone stopped the rally earlier in the week at 1.1324.
The short-term range is 1.1184 to 1.1324. Its retracement zone at 1.1254 to 1.1238 is currently being tested. This zone is very important because aggressive buyers may step in on a test of this zone in an effort to form a potentially bullish secondary higher bottom. However, prices could plunge further if 1.1238 fails as support.
The major support is a long-term Fibonacci level at 1.1185.
Daily Technical Forecast
Based on the early price action and the current price at 1.1241, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the potential support cluster at 1.1238.
The support cluster at 1.1238 is a combination of a downtrending Gann angle and a short-term Fibonacci level. Holding above this level will indicate the presence of buyers. Overcoming an uptrending Gann angle at 1.1244 and the short-term 50% level at 1.1254 will indicate the buying is getting stronger.
This will make 1.1254 a potential trigger point for an intraday acceleration to the upside.
Taking out 1.1238 and sustaining the weakness will signal the presence of sellers. This could trigger a break into the next uptrending Gann angle at 1.1214. This is the last potential support angle before the Fibonacci level at 1.1185, the main bottom at 1.1184 and another main bottom at 1.1177.
This article was originally posted on FX Empire
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