EUR/USD Mid-Session Technical Analysis for July 25, 2019

The Euro is trading lower against the U.S. Dollar on Thursday after the European Central Bank passed on a rate cut, but signaled further stimulus was coming. The price action indicates that investors are anticipating dovish comments from ECB President Mario Draghi when he holds his press conference at 12:30 GMT.

At 12:37 GMT, the EUR/USD is trading 1.1110, down 0.0029 or -0.27%.

The ECB left its benchmark rate cut unchanged, but signaled it was preparing to cut short-term interest rates for the first time since early 2016 and possibly restart its massive bond-buying program.

ECB policymakers said in their statement that it expects its key interest rate, currently at minus 0.4%, to remain at its current level or lower through the first half of 2020. The ECB also said its staff would examine options aimed at pushing up persistently low inflation, including potential new asset purchases.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through a pair of main bottoms at 1.1116 and 1.1107 reaffirmed the downtrend earlier today. The daily chart indicates there is plenty of room to the downside with the next major support the May 11, 2017 main bottom at 1.0838.

On the upside, the nearest resistance is the long-term Fibonacci level at 1.1185.

Daily Swing Chart Forecast

Based on the early price action and the current price at 1.1110, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to yesterday’s close at 1.1139.

Bullish Scenario

Given the prolonged move down in terms of price and time, the EUR/USD is ripe for a closing price reversal bottom. If confirmed, this could lead to a minimum 2 to 3 day counter-trend rally. We’ve already had the lower-low, now all we need is a close over 1.1139.

Taking out 1.1139 on an intraday basis could create the upside momentum needed to trigger a rally into the major Fibonacci level resistance at 1.1185.

Bearish Scenario

A sustained move under 1.1139 will signal the presence of sellers. This could lead to another test of today’s intraday low at 1.1101. Taking out this level could trigger the start of a steep sell-off.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.