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EUR/USD Mid-Session Technical Analysis for May 16, 2019

James Hyerczyk

The Euro is trading flat on Thursday with traders digesting President Trump’s plan to delay implementing tariffs on imported cars and parts by up to six months, and some investors on the sidelines amid worries around an upcoming European parliamentary election, in which anti-establishment parties may make significant gains.

Euro traders are still on edge a day after Italian Deputy Prime Minister Matteo Salvini said European Union budget regulations are ‘starving the continent” and must be changed, a day after he spooked the financial markets by saying Italy should be ready to break the rules.

Traders could react to a slew of U.S. economic data and any fresh developments surrounding U.S.-China trade relations.

At 12:34 GMT, the EUR/USD is trading 1.1196, down 0.0006 or -0.05%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. Momentum is also trending lower. A trade through 1.1265 will change the main trend to up. A move through 1.1135 will signal a resumption of the downtrend.

The major support is a long-term Fibonacci level at 1.1185. On the upside, the resistance is a retracement zone 1.1218 to 1.1243.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to a price cluster at 1.1204.

Bearish Scenario

A sustained move under 1.1204 will indicate the presence of sellers. This could drive the EUR/USD into the Fibonacci level at 1.1185, followed closely by the uptrending Gann angle at 1.1182. This angle held as support on Wednesday.

The angle at 1.1182 is the trigger point for an acceleration to the downside with the next target angle coming in at 1.1147.

Bullish Scenario

A sustained move over 1.1204 will signal the presence of buyers. If this creates enough upside momentum this look for a possible retest of the 50% level at 1.1218, followed by a downtrending Gann angle at 1.1234.

Watch the price action and read the order flow at 1.1182. This is an important price.

This article was originally posted on FX Empire