EUR/USD Mid-Session Technical Analysis for October 30, 2019
The Euro is trading lower against the U.S. Dollar on Wednesday. Earlier in the session, position-squaring ahead of the Federal Reserve interest rate and monetary policy decisions, drove the signal currency higher.
However, the Euro turned lower after ADP and Moody’s Analytics reported that companies hired 125,000 employees in October versus a 100,000 forecast. Further weakness was seen when it was reported that U.S. GDP rose a better-than-expected 1.9% in the third quarter. Both pieces of economic data made the U.S. Dollar a more attractive investment.
At 12:41 GMT, the EUR/USD is trading 1.1105, down 0.0006 or -0.05%.
At 18:00 GMT, the Federal Reserve is largely expected to cut its benchmark interest rate 25 basis points. The market also expects the Fed to signal that it will hit the pause button for December and likely hint at one rate cut next year.
According to the CME Group’s FedWatch tool, traders see about at 30% chance of another cut in December. This is down from 70% earlier in the month.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of a closing price reversal top on October 21.
A trade through 1.1179 will negate the chart pattern and signal a resumption of the uptrend. The main trend will officially turn down on a trade through 1.0879.
The minor trend is down. This confirms the shift in momentum. A trade through 1.1073 will indicate the selling is getting stronger. A move through 1.1163 will change the minor trend to up.
The short-term range is 1.1179 to 1.1073. Its 50% level or pivot at 1.1126 is resistance. This level stopped the rally earlier today.
The minor range is 1.0991 to 1.1179. Its 50% level or pivot at 1.1085 is potential support. The EUR/USD has been straddling this level all week.
The main range is 1.0879 to 1.1179. Its retracement zone at 1.1029 to 1.0994 is the next major target zone.
Daily Technical Forecast
Based on the early price action and the current price at 1.1105, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the pivot at 1.1126.
Bearish Scenario
A sustained move under 1.1126 will indicate the presence of sellers. Crossing to the weak side of a downtrending Gann angle at 1.1109 will indicate the selling is getting stronger. This could trigger a break into an uptrending Gann angle at 1.1089 and a 50% level at 1.1085.
The trigger point for a potential acceleration to the downside is 1.1085. If this move creates enough downside momentum to take out last week’s low at 1.1073, then we could see a plunge into the main 50% level at 1.1029.
Bullish Scenario
A sustained move over 1.1126 will signal the presence of buyers. This could trigger a surge to the upside with potential target angles coming in at 1.1144 and 1.1162. The latter is the last potential resistance angle before the 1.1179 main top.
This article was originally posted on FX Empire
