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EUR/USD Mid-Session Technical Analysis for September 10, 2020

By:
James Hyerczyk
Published: Sep 10, 2020, 11:22 UTC

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1826.

Euro

The Euro is edging higher against the U.S. Dollar shortly before the European Central Bank (ECB) monetary policy announcements at 11:45 GMT. The price action is probably being fueled by position-squaring due to the uncertainty over the central bank’s decisions.

At 11:06 GMT, the EUR/USD is trading 1.1837, up 0.0033 or +0.28%.

Euro Zone government bond yields were flat to a touch lower on Thursday, before the ECB meeting that investors suspect could signal more stimulus given weak inflation and a firm Euro.

Having acted aggressively in recent months to protect the economy from the coronavirus shock, the ECB is not expected to take any major policy action.

But inflation has turned negative and a strong Euro, which adds to downward pressure on prices, has raised concern about long-term price growth that could force the ECG to act again soon.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Wednesday when sellers took out the previous main bottom at 1.1754. There was no follow-through to the downside and the market produced a closing price reversal bottom after the news.

The main downside target and potential support area is 1.1691 to 1.1616.

The short-term range is 1.1711 to 1.2011. Its retracement zone at 1.1826 to 1.1861 is potential resistance.

The new minor range is 1.2011 to 1.1753. Its retracement zone at 1.1882 to 1.1912 is another potential upside target area.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1826.

Bullish Scenario

A sustained move over 1.1826 could trigger a counter-trend surge to the upside. However, the rally could be labored because of the retracement levels at 1.1861, 1.1882 and 1.1912.

Bearish Scenario

A sustained move under 1.1826 will indicate the presence of sellers. This could lead to a retest of 1.1753. Taking out this bottom could drive the EUR/USD into another main bottom at 1.1711 and the main 50% level at 1.1691.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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