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EUR/USD Mid-Session Technical Analysis for May 23, 2019

James Hyerczyk

The Euro is under pressure on Thursday due to concerns over a weakening Euro Zone economy. Earlier today, reports showed a drop in manufacturing and services data in Germany and the Euro Zone. This confirmed that the escalating trade disputes are having a negative effect on the European economy. Concerns over the global economy have been compounded by worries over political uncertainty, particularly in Europe.

German Flash Manufacturing PMI came in at 44.3, below the 44.9 forecast and 44.4 previous read. Euro Zone Flash Manufacturing PMI was 47.7. This was below the 48.2 estimate and 47.9 previous read. Euro Zone Flash Services PMI was 52.5. Additionally, German Ifo Business Climate came in at 97.9. Traders were looking for a reading of 99.2

At 13:12 GMT, the EUR/USD is trading 1.1117, down 0.033 or -0.30%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out the previous main bottom at 1.1135. The next targets are main bottoms at 1.1112 and 1.1109.

On the upside, the nearest resistance is a long-term Fibonacci level at 1.1185.

Daily 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 Gann angle at 1.1136.

Bearish Scenario

A sustained move under 1.1136 will indicate the presence of sellers. If the downside momentum continues then look for the selling to extend into the April 26 main bottom at 1.1112. This is followed closely by the May 30, 2017 main bottom at 1.1109.

The main bottom at 1.1109 is very important because the next major support is way down at 1.0300. Crossing to the weak side of the downtrending Gann angle at 1.1104 will put the EUR/USD in a bearish position.

Bullish Scenario

Holding 1.1112 to 1.1109 will signal the return of buyers. Overtaking 1.1136 will indicate the short-covering is getting stronger. This may generate the upside momentum needed to challenge the next Gann angle at 1.1160.

This article was originally posted on FX Empire