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EUR/USD Mid-Session Technical Analysis for June 10, 2020

By:
James Hyerczyk
Published: Jun 10, 2020, 11:47 UTC

The direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the intraday high at 1.1388.

EUR/USD

The Euro is trading higher against the U.S. Dollar, boosted by expectations the Federal Reserve will maintain its accommodative policy to support the U.S. economy through the coronavirus crisis.

U.S. policymakers will also be publishing their first economic projections since the pandemic set off a recession in February.

Ahead of the Fed announcements, Chairman Powell’s press conference and policymaker economic forecasts, the yield curve is flattening, which is putting added pressure on the U.S. Dollar. All week long there has been speculation the Fed would announce it was likely to try to flatten the yield curve, but they may not have too since yields have fallen due to market pressure.

At 11:29 GMT, the EUR/USD is trading 1.1379, up 0.0042 or +0.37%.

In other news, demand for Euro Zone government debt was little changed on Wednesday, after several governments launched syndicated bond sales on Tuesday and were met with strong demand. More supply was expected on Wednesday, with Germany re-opening a 30-year Bund and Finland launching a new 20-year benchmark bond.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier Wednesday when buyers took out the last swing top at 1.1384. A new main bottom has formed at 1.1240. A trade through this level will change the main trend to down.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1167 to 1.1066 is controlling the longer-term direction of the EUR/USD. The closest support is the Fibonacci level at 1.1167.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1379, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the intraday high at 1.1388.

Bullish Scenario

A sustained move over 1.1388 will indicate the buying is getting stronger. If this creates enough upside momentum then we could see a near-term rally into the main tops at 1.1496 and 1.1514.

Bearish Scenario

A sustained move under 1.1388 will signal the return of sellers. A trade through 1.1337 will turn the EUR/USD lower for the session. This would be a potentially bearish sign with 1.1240 the next likely target.

Side Notes

Look for the Fed to be accommodative. This should be enough to underpin the EUR/USD. If the Fed says it is going to try to flatten the yield curve then look for a possible spike to the upside.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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