EUR/USD Mid-Session Technical Analysis for March 12, 2020

The Euro is trading lower against the U.S. Dollar on Thursday after the European Central Bank approved fresh stimulus measures to help the Euro Zone economy cope with the growing cost of the coronavirus epidemic, but kept interest rates unchanged in a move that may disappoint financial markets.

The ECB said it would offer fresh loans to banks, offer previously agreed liquidity facilities at even more favorable rates and it would temporarily increase asset purchases to help the economy cope.

At 14:02 GMT, the EUR/USD is trading 1.1218, down 0.0054 or -0.48%.

“A temporary envelope of additional net asset purchases of 120 billion Euros (105.8 billion pounds) will be added until the end of the year, ensuring a strong contribution from the private sector purchase programmes,” the ECB said.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1496 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 1.0778.

The minor trend is also up. The minor trend will change to down on a trade through 1.1096. This move will also shift momentum to the downside.

The main range is 1.0778 to 1.1496. Its retracement zone at 1.1137 to 1.1052 is the primary downside target. Since the main trend is up, buyers could come in on a test of this zone.

Inside the zone is an uptrending Gann angle at 1.1078. This angle is also a valid downside target.

Daily Technical Forecast

Based on the early price action and the current price at 1.1218, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the steep downtrending Gann angle at 1.1256.

Bearish Scenario

A sustained move under 1.1256 will indicate the presence of sellers. The first downside target is a 50% level at 1.1137. Watch of a technical bounce on the first test of this level.

If 1.1137 fails as support then look for the selling to possibly extend into the uptrending Gann angle at 1.1078 then the Fibonacci level at 1.1052.

Taking out 1.1052 could trigger an acceleration to the downside.

Bullish Scenario

A sustained move over 1.1256 will signal the return of buyers. This could trigger a rebound rally into a potential resistance cluster at 1.1376 to 1.1378.