EUR/USD Forex Technical Analysis – Main Trend Down, but Momentum Could Shift if Buyers Regain 1.1827 Pivot

The Euro finished lower on Thursday after bouncing back from a more-than-3-1/2 month low against the U.S. Dollar the previous session after dovish comments by Federal Reserve Chairman Jerome Powell drove U.S. Treasury yields lower.

In testimony to a U.S. Congress sub-committee, Powell said the U.S. economy was “still a ways off” from levels the central bank wanted to see before tapering its monetary support.

At 04:26 GMT, the EUR/USD is trading 1.1811, down 0.0001 or -0.01%.

In other news, Euro Zone government bond yields fell on Thursday, mainly tracking U.S. Treasuries, as investors continued to assess the dovish commentary from Powell.

Meanwhile, the ECB added to the dovish tone, reiterating its dovish stance as the Italian policymaker Ignazio Visco said the central bank would not tighten its ultra-easy stimulus policy for a long time to support economic recovery in the Euro Zone.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart although momentum is trying to shift to the upside following Wednesday’s potentially bullish closing price reversal bottom.

A trade through 1.1881 will change the main trend to up. A move through 1.1772 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor range is 1.1881 to 1.1772. The EUR/USD is currently trading on the weak side of its pivot at 1.1827.

The short-term range is 1.1975 to 1.1772. Its retracement zone at 1.1873 is also potential resistance.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the EUR/USD on Friday is likely to be determined by trader reaction to the minor pivot at 1.1827.

Bearish Scenario

A sustained move under 1.1827 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 1.1772. Taking out this level could trigger a sharp break into the March 31 main bottom at 1.1704.

Bullish Scenario

A sustained move over 1.1827 will signal the presence of buyers. This could trigger a surge into a series of resistance levels including a 50% level at 1.1873, a main top at 1.1881, a main top at 1.1895 and a Fibonacci level at 1.1898.

The Fib level is likely the trigger point for an acceleration to the upside.