EUR/USD Forex Technical Analysis – Bullish Traders Eyeing 1.1496 Main Top

The Euro rose to its highest level since March 10 against the U.S. Dollar on Wednesday on hopes European Union leaders may agree on stimulus and deepening fiscal integration to shield the economy from the coronavirus pandemic. The dollar was also on the defensive following an uptick in U.S. inflation and news of progress in vaccine development.

At 09:16 GMT, the EUR/USD is trading 1.1431, up 0.0033 or +0.29%.

The Euro has been helped by hopes the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic.

The dollar was also pressured on Tuesday after U.S. consumer prices rebounded 0.6% month-on-month, the most in nearly eight years, in June, easing worries about deflationary pressures from the economic downturn.

Further boosting investors’ risk appetite, Moderna Inc’s experimental vaccine for COVID-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study, U.S. researchers reported on Tuesday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the June 10 main top at 1.1422. The main trend will change to down if sellers take out the last swing bottom at 1.1185.

The minor trend is also up. A trade through 1.1255 will change the minor trend to down. This will also shift momentum to the downside.

Daily Swing chart Technical Forecast

The EUR/USD is up 10 sessions from the last main bottom. This puts it inside the window of time for a closing price reversal top. Since the Forex pair already posted a higher-high, trader reaction to yesterday’s close at 1.1398 will set the tone for the rest of the session.

Bullish Scenario

A sustained move over 1.1398 will indicate the presence of buyers. If this move continues to generate enough upside momentum then look for the rally to possibly extend into the pair of main tops at 1.1496 and 1.1514.

Bearish Scenario

A sustained move under 1.1398 will signal the presence of sellers. A close under this level will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction of at least a 50% correction of the last rally. This target is about 1.1315.