Advertisement
Advertisement

EUR/USD Mid-Session Technical Analysis for September 30, 2020

By:
James Hyerczyk
Published: Sep 30, 2020, 12:35 UTC

The direction of the EUR/USD is likely to be determined by trader reaction to the minor 50% level at 1.1742 and the main 50% level at 1.1691.

EUR/USD

The Euro is trading lower against the U.S. Dollar on Wednesday. Some of the weakness in the single-currency is related to caution and dollar safe-haven buying in reaction to Tuesday night’s U.S. presidential debate. Others are reacting to a policy shift by the European Central Bank (ECB).

At 12:14 GMT, the EUR/USD is trading 1.1708, down 0.0035 or -0.30%.

European Central Bank President Christine Lagarde set the scene on Wednesday for changing the ECB’s strategy to align it with that of the Federal Reserve, possibly including a commitment to let inflation overshoot after it has been low for too long.

In her first update on the ECB’s ongoing review of its strategy, Lagarde also opened the door to giving the central bank less time to achieve its elusive goal.

“If credible, such a strategy can strengthen the capacity of monetary policy to stabilize the economy when faced with the lower bound,” Lagarde told an event.

Both arguments would imply that the ECB needed to continue or even ramp up its aggressive stimulus policy as inflation is expected to lag its target for years to come.

More stimulus would be bearish for the Euro.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1612 will signal a resumption of the downtrend. The main trend changes to up on a move through 1.1872.

The main range is 1.1371 to 1.2011. Its retracement zone at 1.1691 to 1.1616 is potential support. Recently, traders tried to establish a support base inside this retracement zone.

The minor range is 1.1872 to 1.1612. Its retracement zone at 1.1742 to 1.1773 is resistance. This zone stopped the rally at 1.1755 earlier today.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the minor 50% level at 1.1742 and the main 50% level at 1.1691.

Bearish Scenario

A sustained move under 1.1742 will indicate the presence of sellers. However, crossing to the weak side of 1.1691 could trigger a steep break with the next potential target a support cluster at 1.1616 to 1.1612. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

Holding 1.1691 will suggest the presence of aggressive counter-trend traders. The first upside target is 1.1742.

Overtaking 1.1742 will indicate the buying is getting stronger with potential upside targets coming in at 1.1755 and 1.1773. The latter is a potential trigger point for an acceleration to the upside.

Sideways

We’re looking at a standard chart pattern. Sellers are trying to form a potentially bearish secondary lower top inside the minor retracement zone, while buyers are trying to form a potentially bullish secondary higher bottom inside the major retracement zone.

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.

Did you find this article useful?

Advertisement