EUR/USD Mid-Session Technical Analysis for March 16, 2021

The Euro is inching higher in a cautious trade on Tuesday as traders prepare for the start of the U.S. Federal Reserve’s two-day monetary policy meeting. Weaker Treasury yields are also weighing on the greenback.

Fed policymakers are expected to leave interest rates unchanged and are not considered likely to change their monetary policy, however, they are expected to forecast that the U.S. economy will grow in 2021 at its fastest rate in decades with unemployment falling and inflation rising.

At 12:40 GMT, the EUR/USD is trading 1.1935, up 0.0004 or +0.03%.

Investors will closely assess whatever the Fed has to say about the rise in yields, which have gained on bets that economic growth and inflation could prompt a faster-than-expected normalization of monetary policy.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1836 will signal a resumption of the downtrend. The main trend will change to up on a trade through 1.2243. This change in trend point will move to 1.1990 if 1.1910 is violated.

The minor trend is also down. The minor trend will change to up on a trade through 1.1990. This will also shift momentum to the upside. If 1.1910 is taken out then the minor top will change to a main top.

The minor range is 1.1836 to 1.1990. Its 50% level at 1.1913 has been providing support the last four sessions.

The second minor range is 1.2113 to 1.1836. Its 50% level at 1.1974 is resistance.

The main resistance is the 1.2010 to 1.2074 retracement zone. This area is controlling the longer-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1913.

Bearish Scenario

A sustained move under 1.1913 will indicate the presence of sellers. If this move creates enough downside momentum then look for the break to extend into 1.1836, followed by 1.1800.

Bullish Scenario

A sustained move over 1.1913 will signal the presence of buyers. This could trigger a surge into a small resistance cluster at 1.1974, 1.1990 and 1.2010. Since the main trend is down, sellers are likely to show up to defend the trend.