EUR/USD Mid-Session Technical Analyis for May 27, 2020

The Euro is edging higher against the U.S. Dollar on Wednesday as investors eyed a fresh European Union stimulus plan, but renewed U.S.-China tensions over Hong Kong may be limiting gains.

In other news, Euro Zone government bond yields edged down on Wednesday, easing off from Tuesday’s highs, as investors waited for proposals about the EU recovery fund which are due to be presented to the European Parliament.

The European Commission will announce a plan to help the EU economy recovery from its coronavirus slump with a mix of grants, loans and guarantees exceeding 1 trillion Euros that raised controversy even before it was announced.

Hopes for a coordinated fiscal response to the coronavirus crisis have been boosted since France and Germany made proposals for a 500-billion-Euro recovery fund.

At 12:08 GMT, the EUR/USD is trading 1.0993, up 0.0011 or +0.10%.

Earlier in the session, European Central Bank President Christine Lagarde said the Euro Zone economy is likely to shrink between 8% and 12% this year as it struggles to overcome the impact of the coronavirus pandemic.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was re-established earlier in the session when buyers took out a pair of previous main tops at 1.1008 and 1.1018. A trade through 1.0871 will change the main trend to down.

The short-term range is 1.1147 to 1.0727. Its retracement zone at 1.0937 to 1.0987 is currently being tested.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1066 to 1.1167 is the primary upside target. This is potential resistance.

The intermediate range is 1.0636 to 1.1147. Its retracement zone at 1.0892 to 1.0831 is potential support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.0993, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the Fibonacci level at 1.0987.

Bullish Scenario

A sustained mover over 1.0987 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a possible surge into the main 50% level at 1.1066.

Bearish Scenario

A sustained move under 1.0987 will signal the presence of sellers. This could trigger a labored sell-off with potential targets a pair of 50% levels at 1.0937 and 1.0892, and the main bottom at 1.0871.

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