EUR/USD Mid-Session Technical Analysis for March 9, 2021

The Euro is trading higher against the U.S. Dollar on Tuesday. There isn‘t any major news fueling the move unless you call profit-taking and position-squaring a major event. The short-covering rally is likely being fueled by weaker U.S. Treasury yields, which are driving down demand for the U.S. Dollar. Let’s just keep it simple, now is not the time to read into the price action.

At 13:00 GMT, the EUR/USD is trading 1.1889, up 0.0044 or +0.37%.

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Profit-taking and position-squaring ahead of the U.S. Federal Reserves two-day meeting next week, could set the early tone this week although expectations are low that the central bank will announce major policy changes after Chair Jerome Powell last week did not express concern about the rise in bond yields.

In other news, the Euro Zone economy contracted more than previously estimated in the last three months of 2020 against the previous quarter, revised data showed on Tuesday, as household consumption plunged because of COVID-19 lockdowns.

This news doesnt seem to be bothering traders today, who are clearly focused on rates and the dollar.

At 13:08 GMT, the EUR/USD is trading 1.1893, up 0.0048 or +0.41%.

[fx-image src=/2021/03/Daily-EURUSD-6.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2021/03/Daily-EURUSD-6.jpg originalWidth=1920 ratio=1.99]Daily EUR/USDDaily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may be getting ready to shift to the upside.

A trade through 1.2243 will change the main trend to up. This is highly unlikely but the EUR/USD is down eight sessions from the last main top, which puts it inside the window of time to form a potentially bullish closing price reversal bottom.

A trade through the intraday low at 1.1836 will signal a resumption of the downtrend.

The nearest downside target is the November 23, 2020 main bottom at 1.1800.

The main range is 1.2349 to 1.1836. Its retracement zone at 1.2010 to 1.2074 is the primary upside target.

[fx-article-ad]Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday will be determined by trader reaction to 1.1845.

Bullish Scenario

A sustained move over 1.1845 will indicate the presence of buyers. If this move creates enough near-term momentum, the EUR/USD could test 1.2010 within a few days.

Bearish Scenario

A sustained move under 1.1845 will signal the presence of sellers. This could trigger a retest of 1.1836, followed by 1.1800.

Side Notes

A close over 1.1845 will form a closing price reversal bottom on the daily chart. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally, but not necessarily a change in trend.

For a look at all of todays economic events, check out our economic calendar.