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EUR/USD Mid-Session Technical Analysis for September 12, 2019

James Hyerczyk

The Euro is trading lower on Thursday after the European Central Bank (ECB) announced a massive new bond-buying program designed to reignite its ailing Euro Zone economy.

ECB President Mario Draghi announced that the central bank would cut its main deposit rate by 10 basis points to -0.5% in line with expectations.

The ECB also changed its TLTRO rate to provide more favorable bank lending conditions and match that of its refinancing rate, erasing a previous 10 basis point spread. In line with market expectations, the ECB also introduced rate tiering, a measure encouraged by the heads of various major European banks during the latest earnings season.

The initial response indicates traders read the news as dovish.

At 12:03 GMT, the EUR/USD is trading 1.0961, down 0.0048 or -0.45%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.0926 will signal a resumption of the downtrend after more than a week of counter-trend pressure.

The main trend will change to up on a trade through the new swing top at 1.1085.

The short-term range is 1.0926 to 1.1085. Its retracement zone at 1.0987 to 1.1005 is potential intraday resistance. Overcoming this area could shift momentum to the upside later in the day.

The main range is 1.1164 to 1.0926. It retracement zone at 1.1045 to 1.1073 is controlling the near-term direction of the EUR/USD.

Daily Technical Forecast

Based on the early price action and the current price at 1.0961, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at 1.0961.

Bearish Scenario

A sustained move under 1.0961 will indicate the presence of sellers. This could trigger a further break into the next uptrending Gann angle at 1.0944. This is the last potential support angle before the 1.0926 main bottom.

Taking out 1.0926 could trigger a break into a downtrending Gann angle at 1.0904. Crossing to the weak side of this angle will put the EUR/USD in an extremely bearish position with 1.0838 the next major downside target.

Bullish Scenario

A sustained move over 1.0926 will signal the return of buyers. If this creates enough upside momentum then look for a labored rally into a series of levels at 1.0987, 1.0996 and 1.1005.

Overcoming 1.1005 could trigger a surge to the upside with the downtrending Gann angle at 1.1034 the next major target.

This article was originally posted on FX Empire