EUR/USD Mid-Session Technical Analysis for March 5, 2018

The EUR/USD is trading flat to lower on Monday in reaction to an inclusive election in Italy that pointed to prolonged political uncertainty. Later today, investors will get the opportunity to react to U.S. Final Services PMI and a speech from FOMC Member Quarles. The major report is ISM Non-Manufacturing PMI. It is expected to come in at 58.9, below the previous 59.9.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has shifted to the upside with the formation of the closing price reversal bottom on March 1.

A trade through 1.2153 will negate the closing price reversal bottom and signal a resumption of the downtrend. The trend will change to up on a move through 1.2555.

The major support is a long-term 50% level at 1.2166. This level was briefly penetrated on March 1 but quickly recaptured. The longer-term direction of the Euro will be determined by trader reaction to this level.

The intermediate range is 1.2555 to 1.2153. Its 50% to 61.8% zone at 1.2354 to 1.2401 is the primary upside target. Since the trend is down, sellers are likely to come in on a test of this zone. This occurred earlier in the session when sellers stopped the rally at 1.2364.

The short-term range is 1.2153 to 1.2364. Its 50% level or pivot is 1.2259. Holding this level will indicate that aggressive counter-trend buyers are coming into the market. A move through this level will signal the return of sellers.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the short-term pivot at 1.2259.

A sustained move over 1.2259 will signal the presence of buyers. This could create the upside momentum needed to challenge 1.2354, 1.2364 then 1.2401. This price is the trigger point for a possible acceleration into 1.2555.

A sustained move under 1.2259 will indicate the presence of sellers. This move could generate the downside momentum needed to challenge 1.2166 to 1.2153.