EUR/USD Mid-Session Technical Analysis for March 2, 2018

The EUR/USD is trading sharply higher in reaction to President Trump’s announcement on Thursday that he would impose large tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners such as China, Europe and Canada.

Additionally, Euro traders are preparing for Sunday’s Italian parliamentary election and the level of support for populist agendas that could have a wider impact on the European Union. Also on Sunday, Germany’s Social Democrats announce the result of a binding members’ vote on a coalition deal that would secure Angela Merkel a fourth term as chancellor.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on a move through the previous main bottom at 1.2205. However, the closing price reversal bottom on Thursday and the subsequent confirmation earlier today, has shifted momentum to the upside.

A trade through 1.2153 will negate the chart pattern and signal a resumption of the downtrend.

The main retracement zone is 1.2235 to 1.2160. Inside this zone is the long-term 50% level at 1.2166. This area provided support on Thursday and is still support today.

The short-term range is 1.2555 to 1.2153. If the upside momentum continues then look for the rally to extend into at least its retracement zone at 1.2354 to 1.2401. Since the main trend is down, we could see the return of sellers on a test of this zone.

Daily Technical Forecast

Based on the current price at 1.2306, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the long-term uptrending Gann angle at 1.2295.

A sustained move over 1.2295 will indicate the presence of buyers. This could trigger a further rally into a potential resistance cluster at 1.2354 to 1.2355. Watch for sellers on the first test of this area.

Overcoming 1.2355 could trigger an acceleration into the Fib level at 1.2401.

A sustained move under 1.2295 will signal the presence of sellers. This could trigger a break into a pair of uptrending Gann angles at 1.2257 and 1.2233.

Additional support is a 50% level at 1.2235 and another uptrending Gann angle at 1.2202.