EUR/USD Mid-Session Technical Analysis for July 28, 2020

The Euro is trading slightly lower against the U.S. Dollar on Tuesday after hitting a two-year high the previous session. Traders are squaring positions ahead of the start of a two-day Federal Reserve meeting, which is expected to show no change in policy.

No monetary policy changes are likely but traders are speculating about a change in emphasis in the Fed’s forward guidance at the meeting, which starts on Tuesday.

At 13:30 GMT, the EUR/USD is trading 1.1732, down 0.0018 or -0.16%.

Traders are also closely monitoring the debate in Congress between Republicans and Democrats over another stimulus bill. The Republicans are proposing another $1 trillion package, while the Democrats are looking to boost stimulus this round to about $3 trillion.

Democrats are saying the Republican plan is too limited, while traders feel a compromise may even reinforce concerns over the outlook for the U.S. economy.

The Fed is widely expected to remain dovish on interest rates for years, while Congress may have to provide additional stimulus later in the year if the U.S. cannot gain control over the spread of the coronavirus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1781 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at 1.1185.

The minor trend is also up. The minor trend will change to down if sellers take out 1.1371. This will also shift momentum to the downside.

The minor range is 1.1371 to 1.1781, making its retracement zone at 1.1576 to 1.1528 the nearest downside target zone.

The main range is 1.1185 to 1.1781. Is retracement zone at 1.1483 to 1.1413 is the main target area.

Daily Swing Chart Technical Analysis

Taking out 1.1781 will signal a resumption of the uptrend. This could send prices to 1.1800 fairly easily.

A sustained move under 1.1781 will indicate the presence of sellers. Taking out yesterday’s low at 1.1642 will make 1.1781 a new minor top.

If the EUR/USD takes out 1.1781 then closes under 1.1751 then a potentially bearish closing price reversal top will form. If confirmed, this could lead to the start of a 2 to 3 day correction with 1.1576 to 1.1528 the next likely downside target zone.