EUR/USD Mid-Session Technical Analysis for March 21, 2017

The EUR/USD is trading above 1.0800 for the first time since February 2. Bullish traders are reacting to positive developments in France where centrist Emmanuel Macron outdueled far-right rival Marine Le Pen in a TV debate.

In addition to the easing of some of the perceived political risks to the Euro due to the outcome of the debate in France, buyers are also boosting the EUR/USD amid speculation the European Central Bank will rein in its ultra-loose monetary policy later this year.

Also helping boost the Euro was the weaker U.S. Dollar which remained under pressure mostly on expectations for U.S. interest rates and the outcome of the G-20 summit over the week-end which reflected the Trump administration’s attitude toward trade.

Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the previous top at 1.0782. This move also negated the potentially bearish closing price reversal top.

The new upside target is the February 2 main top at 1.0828, followed by the December 8, 2016 top at 1.0872. The new main bottom is 1.0718. A trade through this price will turn the main trend to down.

Holding above the major retracement zone at 1.0700 to 1.0680 will continue to give the EUR/USD a strong upside bias. This zone should be considered support.

Forecast

The rest of today’s session will be determined by whether the upside momentum will be strong enough to continue the rally into 1.0828 and above. If the speculative buying dries up then the market will be vulnerable for a volatile break back to 1.0782 then 1.0754.