EUR/USD Mid-Session Technical Analysis for July 17, 2020

The Euro is roaring back against the U.S. Dollar to just under a four-month high on Friday after a one-day setback, following the start of a European Union summit that investors hope will advance a recovery fund that would help lift the EU out of recession.

The price action suggests investors are optimistic over a positive outcome from the summit although they will have to wait until Friday evening at the earliest. Nonetheless, this decision will have a major impact on the single-currency with some saying the Euro will either soar to multi-month highs or retreat significantly.

At 16:28 GMT, the EUR/USD is trading 1.1423, up 0.0040 or +0.35%.

So far on Friday, it looks as if traders are betting that Europe’s fiscal leaders will agree on a massive 750 billion-Euro rescue fund. There are some doubters, however, with some saying no agreement will be struck this weekend and that EU leaders may have to meet again in August before gaining full compromise.

The general feeling amongst traders is that news of a deal will spike price higher. However, if there is no deal, the Euro will retreat, but not necessarily collapse.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1452 will signal a resumption of the uptrend. A move through 1.1185 will change the main trend to down. This is highly unlikely however.

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.

The minor range is 1.1255 to 1.1452. Its 50% level at 1.1354 is potential support.

The short-term range is 1.1185 to 1.1452. If the minor support fails then look for the selling to extend into 1.1319 to 1.1287.

Daily Swing Chart Technical Forecast

The EUR/USD is posting an inside move at the mid-session on Friday, which means investor indecision and impending volatility.

Bullish Scenario

Taking out 1.1452 could trigger an acceleration into the March 9, 2020 top at 1.1496, followed by the July 31, 2019 top at 1.1514. The latter is also a trigger point for an acceleration to the upside.

Bearish Scenario

A trade through 1.1370 will signal the return of sellers. This could trigger a short-term break, but the move is likely to be labored because of potential support levels at 1.1354, 1.1319 and 1.1287.