EUR/USD Mid-Session Technical Analysis for March 23, 2018

The EUR/USD is trading higher on Friday ahead of the U.S. trading day that is expected to feature extremely high volatility in the U.S. equity markets amid fears of an escalating trade war between the U.S. and China. Investors are also anticipating potential sanctions against the United States by the European Union in response to tariffs imposed on imports of steel and aluminum.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend will change to up on a trade through 1.2412. It will be reaffirmed by a move through 1.2446. This price is a potential trigger point for a near-term acceleration to the upside with 1.2555 a reasonable target.

The downtrend will resume if 1.2239 is taken out. This could fuel an acceleration into the next main bottom at 1.2153.

The main range is 1.2555 to 1.2153, its retracement zone at 1.2354 to 1.2401 is acting like resistance, but it is also the gateway to an upside breakout.

The short-term range is 1.2153 to 1.2446. Its retracement zone at 1.2300 to 1.2265 is acting like support. It too, has the characteristics of a gateway to the downside.

Essentially, the first layer of support and resistance is 1.2300 to 1.2354. Holding inside this zone will suggest a more neutral market.

The second layer of support and resistance is 1.2265 to 1.2401. Holding inside this zone will also suggest a neutral market, but also indicate that volatility is starting to expand.

Daily Swing Chart Technical Forecast

Based on the current price at 1.2378, the direction of the EUR/USD today is likely to be determined by trader reaction to the 50% levels at 1.2300 and 1.2354.

A sustained move over 1.2354 will indicate the presence of buyers. This could generate the upside momentum needed to challenge the Fibonacci level at 1.2401. The market will begin to strengthen over 1.2412 and 1.2446. Overtaking the latter could trigger an acceleration into 1.2555 over the near-term.

A sustained move under 1.2300 will signal the presence of sellers. This could trigger a quick break into the Fibonacci level at 1.2265. The weakness should expand to the downside on a sustained move under 1.2239 with the next major targets coming in at 1.2166 and 1.2153.

The current price action suggests investors are responding to the weaker U.S. Dollar, but are still a little tentative about how to play the elevated volatility in the stock market. They can’t seem to figure out if the Euro is a risky assets or a safe-haven asset.