The Euro is trading higher against the U.S. Dollar on Wednesday, however, it’s not that the single-currency is stronger, but that the greenback is weaker. The dollar is under pressure again with the selling being driven by lower Treasury yields. Lower yields reduce the greenback’s appeal as an investment.
The Euro fell on Tuesday as investors hoped global monetary policymakers would offer further stimulus to offset trade and travel disruptions. But lack of clarity on what Washington will do has kept many investors on guard.
At 13:10 GMT, the EUR/USD is trading 1.1337, up 0.0054 or +0.47%.
In other news, money markets are fully pricing in a further 10-basis-point cut by the European Central Bank when it meets on Thursday.
Additionally, European Central Bank head Christine Lagarde will participate in a video conference of the EU’s 27 leaders to discuss measures to counter the virus impact, the Council of the European Union said in a tweet.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1496 will signal a resumption of the uptrend. The main trend will change to down on a trade through 1.0778.
The minor trend is also up. A trade through 1.1096 will change the minor trend to down. This will also shift momentum to the downside.
The main range is 1.0778 to 1.1496. Its retracement zone at 1.1137 to 1.1052 is the primary downside target.
The minor range is 1.1496 to 1.1275. Its retracement zone at 1.1386 to 1.1412 is the primary upside target. This zone is important to the chart pattern. Aggressive counter-trend sellers could come in on a test of this zone. They are going to try to form a secondary lower top.
Buyers are going to try to overtake 1.1412 in an effort to challenge the top at 1.1496 and turn 1.1275 into a higher main bottom.
Daily Technical Forecast
Based on the early price action and the current price at 1.1337, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the steep uptrending Gann angle at 1.1338.
A sustained move over 1.1338 will indicate the presence of buyers. This could trigger a quick move into minor targets at 1.1386 and 1.1412.
Overtaking 1.1412 could trigger an extension of the rally into 1.1496. This is followed by a series of main tops at 1.1514, 1.1570 and 1.1622.
A sustained move under 1.1338 will signal the presence of sellers. Taking out yesterday’s low at 1.1275 could trigger an acceleration to the downside with the next major target coming in at 1.1137.
There is a lot of room to the downside so if you’re long, make sure you have an exit strategy in place. Missing the first exit could lead to a rather large giveback.