EUR/USD Mid-Session Technical Analysis for August 2, 2019

The Euro is trading higher against the U.S. Dollar on Friday as a plunge in U.S. Treasury yields is making the greenback a less-attract asset. The catalyst behind the move is the announcement of additional tariffs against China by the United States. The escalation of tensions between the two economic powerhouses likely means the Fed will cut rates again in September. This is also putting pressure on the dollar.

At 12:13 GMT, the EUR/USD is trading 1.1105, up 0.0020 or +0.18%.

At 12:30 GMT, the U.S. will release its highly anticipated non-farm payrolls report for July. It is expected to show the economy added 164,000 jobs in July, down from 224,000 in June. Average Hourly Earnings are expected to have risen 0.2% and the Unemployment Rate may have dipped to 3.6%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. However, yesterday’s closing price reversal bottom and today’s subsequent confirmation shifted momentum to the upside. This could lead to a 2 to 3 day counter-trend rally. A trade through 1.1027 will negate the chart pattern and signal a resumption of the downtrend.

The minor trend is also down. A trade through 1.1188 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 1.1282 to 1.1027. Its retracement zone at 1.1155 to 1.1185 is the first upside target. Since the main trend is down, sellers are likely to come in on the first test of this area.

Daily Technical Forecast

Based on the early price action and the current price at 1.1105, the direction of the EUR/USD is likely to be determined by trader reaction to the downtrending Gann angle at 1.1082.

Bullish Scenario

A sustained move over 1.1082 will indicate the presence of buyers. If this creates enough upside momentum then look for a potential rally into the next downtrending Gann angle at 1.1133, followed closely by the short-term 50% level at 1.1155.

Bearish Scenario

A sustained move under 1.1082 will signal the presence of sellers. If this generates enough downside momentum then look for a pullback into the minor pivot at 1.1071 then the closing price reversal bottom at 1.1027.

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.