EUR/USD Mid-Session Technical Analysis for September 1, 2020

The Euro is trading higher against the U.S. Dollar at the mid-session on Tuesday after giving back more than half of its earlier gains. The single-currency was supported early as the Fed’s latest monetary policy move indicates the central bank is committed to having low interest rates for several years.

Prices began to retreat after Treasury yields rose slightly as traders digested strong U.S. manufacturing data. According to a report, U.S. manufacturing activity continued to rebound in August from the pandemic lows.

At 15:06 GMT, the EUR/USD is trading 1.1953, up 0.0016 or +0.13%.

The Institute for Supply Management (ISM) said Tuesday its manufacturing PMI jumped for a third straight month to a reading of 56.0 last month, the highest level since January 2019. The gauge was at 54.2 in July.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Tuesday when buyers took out Monday’s high and the May 14, 2018 main top at 1.1998.

Taking out the intraday high at 1.2011 will signal a resumption of the uptrend.

The main trend will change to down on a move through the nearest main bottom at 1.1754. This is highly unlikely but due to the prolonged move up in terms of price and time, I wouldn’t be surprised by a closing price reversal top.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1953, the direction of the EUR/USD into the close is likely to be determined by trader reaction to Monday’s close at 1.1937.

Bullish Scenario

A sustained move over 1.1937 will indicate the presence of buyers. Overtaking the intraday high at 1.2011 will indicate the buying is getting stronger. This is a potential trigger point for an acceleration to the upside since the next upside target is the April 30, 2018 main top at 1.2138.

Bearish Scenario

A close under 1.1937 will form a potentially bearish closing price reversal top. This won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction with 1.1861 to 1.1826 the primary downside target.

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