EUR/USD Mid-Session Technical Analysis for December 14, 2018

The Euro is plunging on Friday after the release of weaker-than-forecast economic data. Earlier today, it was reported that the IHS Markit Flash Eurozone PMI Index fell to 51.7 in December, its lowest level in four years. “New business inflows almost stalled, job creation slipped to a two-year low and business optimism deteriorated,” IHS Markit said in a release.

At 1300 GMT, the EUR/USD is trading 1.1285, down 0.0073 or -0.64%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The Euro is feeling further pressure from Monday’s technically bearish closing price reversal top.

A trade through 1.1267 will reaffirm the downtrend. A move through 1.1444 will negate the closing price reversal top and change the main trend to up.

The Euro is also trading on the weak side of a series of retracement levels. These levels are new resistance at 1.1315, 1.1345, 1.1370 and 1.1395.

The next major retracement level target is the Fibonacci level at 1.1185.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the Fibonacci level at 1.1315.

Bullish Scenario

Recovering 1.1315 will indicate the return of buyers. If this can generate enough upside momentum then look for the rally to extend into the 50% level at 1.1345, followed by another 50% level at 1.1370.

Bearish Scenario

A sustained move under 1.1315 will indicate the selling is getting stronger. This could trigger an acceleration into the main bottom at 1.1267. We could see a technical bounce on the first test of this bottom, but if it fails then look for a further break into the next main bottom at 1.1216.

With the Fed raising rates next week and the economy showing signs of weakening in China and the Euro Zone, it’s going to take a lot to turn the EUR/USD around so our bias is likely to be toward the downside today.