EUR/USD Mid-Session Technical Analysis for May 28, 2019

The Euro is trading slightly lower on Tuesday, pressured by trade tensions, Italy debt worries and political risks after the EU parliamentary elections over the weekend. These concerns may be capping gains.

The single-currency is being underpinned by a plunge in the yield on the benchmark 10-year Treasury note which fell to a 19-month low as major investors grew more confident that the U.S.-China trade war will last longer and negatively affect GDP growth more than initially anticipated. Lower yields will eventually weigh on the value of the U.S. Dollar.

At 12:09 GMT, the EUR/USD is trading 1.1193, down 0.0001 or -0.01%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on May 23 at 1.1107. A trade through 1.1264 and 1.1265 will change the main trend to up.

Helping to provide some resistance today is yesterday’s minor closing price reversal top at 1.1215. Taking out this level will indicate the buying is getting stronger.

The minor trend is up. This confirms the shift in momentum to the upside.

The price action is also being controlled by a series of retracement levels.

Resistance is a Fibonacci level at 1.1204, followed by 1.1216 to 1.1241. Support is a price cluster at 1.1186 to 1.1185.

The new short-term range is 1.1107 to 1.1215. If there is a break down under 1.1185 then look for a move into the short-term retracement zone at 1.1161 to 1.1148. Aggressive counter-trend buyers could come in on a test of this zone. They will be trying to form a secondary higher bottom.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the major Fibonacci level at 1.1185.

Bullish Scenario

A sustained move over 1.1185 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into a series of levels including the short-term Fibonacci level at 1.1204, a downtrending Gann angle at 1.1209, a minor top at 1.1215 and a 50% level at 1.1216. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1185 will signal the presence of sellers. The first target is an uptrending Gann angle at 1.1167. This is followed by the short-term retracement zone at 1.1161 to 1.1148.

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.