EUR/USD Mid-Session Technical Analysis for March 2, 2020

The Euro is trading higher against the U.S. Dollar on Monday as traders raised their bets of an interest rate cut by the U.S. Federal Reserve this month to shield the economy from the rapid spread of the coronavirus. The move is being supported by comments from Federal Reserve Chair Jerome Powell, who said on Friday the central bank will “act as appropriate” to support the economy in the face of risks posed by the coronavirus epidemic.

At 13:23 GMT, the EUR/USD is trading 1.1126, up 0.0010 or +0.87%.

Euro investors took his comments as a hint that the Fed will cut interest rates by at least 0.25 percentage points at its next scheduled meeting on March 17-18.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Monday when buyers took out the last main swing top at 1.1095 although momentum has been trending higher since February 21.

The main trend will change to down on a trade through 1.0778. This is highly unlikely, but due to the prolonged move up in price and time, there is the possibility of a closing price reversal top. This would not change the trend to down, but it could signal the start of a 2 to 3 day pullback.

The first main range is 1.1239 to 1.0778. Its retracement zone is 1.1007 to 1.1062. The EUR/USD crossed to the strong side of this zone on Monday, turning it into support.

The second main range is 1.1413 to 1.0778. Its retracement zone at 1.1096 to 1.1170 is currently being tested.

Daily Technical Forecast

Based on the early price action and the current price at 1.1126, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to a downtrending Gann angle at 1.1132.

Bullish Scenario

A sustained move over 1.1132 will indicate the presence of buyers. This could trigger a surge into 1.1170, followed closely by another main top at 1.1173 and another downtrending Gann angle at 1.1185. This is the last potential resistance angle before the 1.1239 main top.

Bearish Scenario

A sustained move under 1.1132 will signal the presence of sellers. This could lead to a pullback into 1.1096, followed by a support cluster at 1.1062 to 1.1058.

The EUR/USD will start to weaken under 1.1058 and may even close lower for the session if this level fails as support.