EUR/USD Mid-Session Technical Analysis for September 16, 2020

The Euro is moving higher against the U.S. Dollar on Wednesday on expectations the Federal Reserve will maintain its downbeat stance on the U.S. economy as it grapples with the COVID-19 pandemic, and keep U.S. interest rates near zero for some time.

The Fed, which began a two-day meeting on Tuesday, is expected to affirm its current zero-interest-rate policy over the next three years, a view that could further weigh on the dollar.

At 10:46 GMT, the EUR/USD is trading 1.1866, up 0.0020 or +0.17%.

The early price action suggests analysts do not expect a rate hike view from the Fed on Wednesday, but if it does happen, that could be a positive for the dollar.

Some traders will be centering their attention on whether the Fed sees a rate hike in 2023. The Euro could strengthen against the U.S. Dollar if the Fed projects no rate hikes. If they put a rate hike in there, pressure could be felt by equities and commodities, and the U.S. Dollar would likely rally.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1753 will signal a resumption of the downtrend. A trade through 1.2011 will change the main trend to up.

The minor trend is up. This is controlling the upside momentum.

The minor range is 1.1753 to 1.1917. Its retracement zone at 1.1835 to 1.1816 has held as support the last four sessions.

The short-term range is 1.2011 to 1.1753. Its retracement zone at 1.1882 to 1.1912 has been providing resistance since September 10.

Daily Swing Chart Technical Forecast

The tight trading range the last four sessions suggests the EUR/USD is set-up for a breakout. The direction will be determined by trader reaction to the Fed announcements.

The early sign of a move will be determined by 50% levels. A pair of Fibonacci levels may be the actual trigger points for the breakouts.

Bullish Scenario

A sustained move over 1.1882 will indicate the presence of buyers. Taking out 1.1912 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1835 will signal the presence of sellers. A drive through 1.1816 could trigger an acceleration to the downside.

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