EUR/USD Mid-Session Technical Analysis for March 22, 2019

The Euro is trading sharply lower on Friday shortly after the U.S. session opening. This puts it in a position to post its biggest loss in two weeks. Falling bond yields in response to weaker-than-expected German manufacturing survey data is helping to make the Euro a less-attractive investment.

Since March 7, the Euro had been trending higher as investors absorbed the European Central Bank’s lower growth forecasts for the Euro Zone, however, today’s data was a surprise for investors because it exposed weakness in the German economy, the Euro Zone’s economic powerhouse.

The IHS Markit’s flash composite Purchasing Managers’ Index measuring activity in German services and manufacturing, which together account for more than two-thirds of the economy, fell to 51.5, its lowest reading since June 2013.

Germany’s 10-year government bond yield was poised to turn negative for the first time since October 2016 and was last trading at 0 percent 0.3 percent higher at 96.71.

At 13:07 GMT, the EUR/USD is trading 1.1298, down 0.0077 or -0.68%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower with the Forex pair currently in a position to post a potentially bearish closing price reversal top. A trade through 1.1448 will signal a resumption of the uptrend. A move under 1.1177 will change the main trend to down. Last week’s close was 1.1325.

The main range is 1.1570 to 1.1177. Its retracement zone at 1.1374 to 1.1420 is resistance. This zone is controlling the near-term direction of the EUR/USD.

The short-term range is 1.1177 to 1.1448. Its retracement zone at 1.1313 to 1.1281 is the primary downside target. This zone is currently being tested. Since the main trend is up, buyers could start to come in on the test of this zone.

Daily Technical Forecast

Based on the early price action and the current price at 1.1298, 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 1.1287.

Bullish Scenario

Holding 1.1287 is indicating the presence of buyers. If this creates enough upside momentum then look for a potential rally into the resistance cluster at 1.1313 to 1.1315. The latter is a potential trigger point for an acceleration to the upside with the first target a short-term pivot at 1.1369, followed closely by the main 50% level at 1.1374.

Bearish Scenario

A sustained move under 1.1287 will signal the presence of sellers. This is followed closely by the short-term Fibonacci level at 1.1281. This price is a potential trigger point for an acceleration into the next uptrending Gann angle at 1.1232.