EUR/USD Mid-Session Technical Analysis for March 23, 2017

The EUR/USD is trading slightly lower at the mid-session as investors await a speech by Fed Chair Janet Yellen and ahead of a key vote by U.S. lawmakers over healthcare legislation.

Yellen could move the EUR/USD if she reveals further information over the timing and frequency of the next Fed rate hike.

In Washington, President Trump and Republican lawmakers are hoping to repeal Obamacare and replace it with a new healthcare plan of their own. This vote is critical because if it fails then it will likely mean further delays in the Trump Administration’s plans to reform taxes, relax regulations and increase spending on infrastructure.

Stocks could plunge on the failure of the passage of this bill. This could create volatility and because of the collapse of the carry trade, could drive the EUR/USD higher.

Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top and today’s subsequent confirmation suggest that momentum may be shifting to the downside. A trade through 1.0719 will turn the main trend to down.

The short-term range is 1.0719 to 1.0824. Its retracement zone is 1.0772 to 1.0759. Holding over this zone is giving the EUR/USD an early upside bias. This zone is controlling the short-term direction of the market.

If 1.0719 fails as support then the major retracement zone at 1.0700 to 1.0660 will become the new support.

Forecast

Based on the current price at 1.0786, the direction of the market today is likely to be determined by trader reaction to the 50% level at 1.0772.

A sustained move over 1.0772 will indicate the presence of buyers. The next target is an uptrending angle at 1.0794. Overcoming this angle will put the EUR/USD in a strong position. This would put the Forex pair in a position to challenge the reversal top at 1.0824. This is followed by the December 18, 2016 main top at 1.0872.

A sustained move under 1.0772 will signal the presence of sellers. The next target is the Fibonacci level at 1.0759. The daily chart opens up to the downside under 1.0759 with the next targets coming in at 1.0724 and 1.0719.

Simply stated, look for an acceleration to the upside on a move over 1.0794 and a downside bias on a sustained move under 1.0759.