EUR/USD Mid-Session Technical Analysis for March 24, 2017

The EUR/USD reversed earlier weakness to move higher for the session on Friday. Speculators came in on the notion that the European Central Bank is heading towards tightening monetary policy amid accelerating growth and inflation rates across the Euro Zone.

The market is setting up for a volatile move. Short-sellers aren’t prepared for an early tightening with the market indicating a price hike in September 2018. We could be looking at a huge short-covering rally if the story begins to gain traction. The EUR/USD could also rally if the U.S. healthcare bill fails in the House today.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.0824 will negate a closing price reversal top and signal the resumption of the uptrend. If the buying is strong enough then look for the rally to extend into the December 8, 2016 main top at 1.0872.

A trade through the minor bottom at 1.0759 will turn the minor trend down. A move through the 1.0719 main bottom will change the main trend to down.

The short-term range is 1.0719 to 1.0824. Its retracement zone at 1.0772 to 1.0759 provided support earlier today. The next major retracement zone support comes in at 1.0700 to 1.0660.

Forecast

Based on the current price at 1.0807, the direction of the market is likely to be determined by trader reaction to the uptrending angle at 1.0814.

Crossing to the strong side of the uptrending angle at 1.0814 will put the EUR/USD in a bullish position with targets at 1.0824 and 1.0872.

The inability to overcome 1.0814 will indicate the presence of sellers. This could drive prices back into 1.0772, 1.0759 and 1.0744.

Look for an acceleration to the downside if 1.0744 fails as support. This could trigger an acceleration into 1.0719 then 1.0700. This is followed by 1.0660 and 1.0654.

As far as the health care vote is concerned, look for the EUR/USD to rally if the vote is “no”. The Forex pair could break if the health care bill is passed into law.