EUR/USD Forex Technical Analysis – Momentum Shifts to Upside on Trade Through 1.1760

The Euro finished higher against the U.S. Dollar on Wednesday as sellers took a breather as the month and quarter ended. Furthermore, we may have seen some position-squaring ahead of the long Easter holiday weekend.

On Wednesday, the EUR/USD settled at 1.1730, up 0.0005 or +-.05%.

In economic news, Euro Zone inflation jumped in March, taking another step in what is likely to be a temporary but sharp climb that may put consumer price growth above the European Central Bank’s near 2% target later this year.

Inflation in the 19 countries sharing the Euro accelerated to 1.3% in March from 0.9% a month earlier, up from a string of negative readings late last year but in line with analysts’ expectations, a flash estimate from Eurostat, the European Union’s statistics office, showed on Wednesday.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum may be getting ready to shift to the upside.

A trade through 1.1989 will change the main trend to up. This is highly unlikely, but a trade through 1.1760 will confirm yesterday’s closing price reversal bottom, perhaps triggering the start of a 2 to 3 day counter-trend rally.

Taking out 1.1704 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor range is 1.1989 to 1.1704. Its 50% level at 1.1847 is the first potential upside target.

The main range is 1.1603 to 1.2349. Its retracement zone at 1.1888 to 1.1976 is controlling the near-term direction of the EUR/USD.

Daily Swing Chart Technical Analysis

The early price action suggests the direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1760.

Bullish Scenario

A sustained move over 1.1760 will indicate the presence of buyers. If this creates enough upside momentum then look for a 2 to 3 day counter-trend rally with 1.1847 the next potential upside target.

Bearish Scenario

A sustained move under 1.1760 will signal the presence of sellers. This could lead to a retest of 1.1704. Taking out this closing price reversal bottom could trigger the start of an acceleration to the downside with 1.1603 the next likely downside target.

For a look at all of today’s economic events, check out our economic calendar.