EUR/USD Mid-Session Technical Analysis for June 27, 2017

The EUR/USD is surging on Tuesday after European Central Bank President Mario Draghi said there are clear signs of a “strengthening and broadening” recovery underway in the Euro Zone.

“As the economy picks up we will need to be gradual when adjusting our policy parameters, so as to ensure that our stimulus accompanies the recovery amid the lingering uncertainties,” he said.

The move suggests that traders believe the ECB is moving closer to tapering stimulus and normalizing interest rates.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has shifted to the upside. A trade through 1.1295 will change the main trend to up with the first target the November 9, 2016 main top at 1.1299, followed by the September 8, 2016 main top at 1.1327.

The short-term range is 1.1295 to 1.1118. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1227 to 1.1206. These levels are new support.

Forecast

Based on the current price at 1.1274, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the downtrending angle at 1.1273. Taking out this angle will mean the buying is getting stronger with potential targets lined-up at 1.1295, 1.1299 and 1.1327.

The inability to overcome 1.1273 will signal the presence of sellers. This could lead to a labored break with potential downside targets coming in at 1.1250, 1.1227 and a support cluster at 1.1206 to 1.1205.

The major support angle is at 1.1169. If this angle fails, we could see an acceleration into 1.1118. Taking out this bottom will change the main trend to down.

We could see volatility later in the session with FOMC Member Patrick Harker expected to deliver a speech at 1515 GMT and Fed Chair Janet Yellen scheduled to give a speech and hold a Q&A session at 1700 GMT. Both Fed speakers could move the markets if they make comments about monetary policy. Hawkish comments will be bearish for the EUR/USD. Dovish comments should help extend the rally.