Trade Through 1.0945 Changes EUR/USD Trend to Down

The Euro is trading near a one-week low on Tuesday, weighed down by the prospect of new sanctions against Russia. Just days earlier, the single-currency reached a one-month high amid increased optimism over an end to the Ukraine conflict.

At 12:20 GMT, the EUR/USD is trading 1.0963, down 0.0009 or -0.08%. On Monday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $101.74, down $0.75 or -0.73%.

“At this stage, the Euro’s performance is very strictly tied to the content of new sanctions the EU looks likely to impose on Russia; the bigger the implications for the energy market, the larger the impact on the Euro,” ING strategists told their clients in a morning note.

“Details of any new sanctions might not be released until tomorrow, and we expect the Euro to remain unable to recover from yesterday’s moves unless the measures prove milder than expected,” they added.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of the closing price reversal top on March 31.

A trade through 1.0945 will change the main trend to down. A move through 1.1185 will signal a resumption of the uptrend.

The EUR/USD is currently trading on the weak side of a pivot at 1.0972, making it resistance. This is followed by another pivot at 1.1019. This is a potential trigger point for an acceleration to the upside with 1.1098 the next target.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Tuesday will likely be determined by trader reaction to the 50% level at 1.0972.

Bearish Scenario

A sustained move under 1.0972 will indicate the presence of sellers. The first target is the main bottom at 1.0945. Taking out this level will change the main trend to down with the main bottom at 1.0901 the next target.

If 1.0901 is taken out with conviction then look for the selling to possibly extend into the March 7 main bottom at 1.0806.

Bullish Scenario

A sustained move over 1.0972 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the pivot at 1.1019. This is a potential trigger point for an acceleration to the upside with 1.1098 the next target.