Yahoo Finance EUR/USD Mid-Session Technical Analysis for January 23, 2020
The Euro is trading lower against the U.S. Dollar shortly before the European Central Bank (ECB) monetary policy and interest rate decisions. Volume has been generally subdued ahead of the ECB meeting and central bank chief Christine Lagarde’s news conference.
Traders aren’t putting much weight in the decisions, but Lagarde’s review should be a market moving event. Anything that gives traders clarity about the timing and structure of the central bank’s plans will be helpful.
Lagarde is expected to announce the start and scope of the ECB’s first strategic review since 2003, which will last for most of the year and span topics from inflation target to digital money and the fight against climate change.
At 12:47 GMT, the EUR/USD is trading 1.1090, down 0.0005 or -0.04%.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, yesterday’s closing price reversal bottom and today’s slight follow-through rally could be a sign that momentum is getting ready to shift to the upside.
A trade through 1.1173 will change the main trend to up. A move through 1.1070 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The minor trend is also down. A trade through 1.1118 will change the minor trend to up. This will shift momentum to the upside.
The EUR/USD is currently sitting inside a major retracement zone at 1.1096 to 1.1045. This zone could be controlling the longer-term direction of the Forex pair.
Daily Technical Forecast
Based on the early price action and the current price at 1.1090, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the major 50% level at 1.1096.
Bullish Scenario
A sustained move over 1.1096 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the minor top at 1.1118 and the downtrending Gann angle at 1.1123.
Bearish Scenario
A sustained move under 1.1096 will signal the presence of sellers. This could lead to a test of the longer-term uptrending Gann angle at 1.1074. This angle stopped the selling on Wednesday.
Taking out the angle at 1.1074 and the reversal bottom at 1.1070 could trigger an acceleration to the downside with the next target a major Fibonacci level at 1.1045.
Side Notes
We’re basically looking for an upside bias to develop over 1.1096 and for the downside bias to resume on a trade through 1.1070.
This article was originally posted on FX Empire
