EUR/USD Mid-Session Technical Analysis for March 20, 2018

The Euro is trading lower at the mid-session. There has been no follow-through to the upside, following yesterday’s dramatic reversal which was fueled by a source-based report by Reuters that European Central Bank policymakers are shifting the focus of their debates and that it could hike interest rates sooner than previously expected.

At 1215 GMT, the EUR/USD is trading 1.2285, down 0.0050 or -0.40%.

Dollar traders are in charge today as they position themselves ahead the start of the Fed’s two-day meeting. On Wednesday, the central bank is widely expected to raise its benchmark interest rate by 25-basis points. The market driving event however will be the Federal Open Market Committee’s interest rate projections.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, yesterday’s closing price reversal bottom may have stopped the selling, at least temporarily.

A trade through 1.2412 will change the main trend to up. A move through 1.2257 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The short-term range is 1.2153 to 1.2446. Its retracement zone at 1.2300 to 1.2265 is new support. It is controlling the short-term direction of the Euro.

The main range is 1.2555 to 1.2153. Its retracement zone at 1.2354 to 1.2401 is the primary upside target. This zone is resistance. The 50% level at 1.2354 stopped the rally earlier in the session.

Daily Swing Chart Technical Forecast

Based on the current price at 1.2285, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.2300.

A sustained move under 1.2300 will indicate the presence of sellers. This could drive the market into 1.2265 then 1.2257. The latter will reaffirm the downtrend and could trigger an acceleration to the downside. The new near-term target is 1.2166.

A sustained move over 1.2300 will signal the return of buyers. If this move generates enough upside momentum then look for a possible retest of 1.2354. This is a possible trigger point for an acceleration into 1.2401.