The Euro finished slightly higher on Friday, which qualifies as a closing price reversal bottom. The chart pattern will be confirmed if buyers can take out Friday’s high at 1.0831. There wasn’t much fanfare in the marketplace on Friday, which may mean the chart pattern was fueled by short-covering and position-squaring ahead of the weekend. If the reversal had been a little more dramatic, it would have indicated the presence of aggressive counter-trend buyers.
On Friday, the EUR/USD settled at 1.0696, up 0.0009 or +0.09%.
After a steep decline, the price action suggests increased speculation that a joint move by the world’s biggest central banks may be in the offing. Investors and companies around the world have been scrambling to get their hands on the U.S. Dollar. However, traders are saying they may have gone too far, which suggests there may be moves by the European Central Bank to shore up the Euro.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.0638 will indicate a resumption of the downtrend. This could lead to a test of the April 10, 2017 main bottom at 1.0569.
A trade through 1.1496 will change the main trend to up. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement.
The short-term range is 1.1496 to 1.0638. Taking out Friday’s high at 1.0831 will confirm the closing price reversal bottom. If this move creates enough upside momentum then look for the rally to possibly extend into its retracement zone at 1.1067 to 1.1168.
The EUR/USD has been walking down a steep downtrending Gann angle at 1.0776 since the March 9 main top at 1.1496. If it continues down this path then look for a test of 1.0569 between March 24 and March 25.
Crossing to the strong side of the downtrending Gann angle at 1.0776 will indicate the return of buyers. The first target is 1.0831. Overtaking this level could trigger an acceleration to the upside with 1.1067 an eventual upside target.
This article was originally posted on FX Empire
More From FXEMPIRE:
- EUR/USD Forex Technical Analysis – Trader Reaction to 1.0776 Sets the Tone on Monday
- Concerned About The Real Estate Market? Us Too – Part I
- A Morning The World Stood Still. Lockdown, Shutdown & Limit down
- U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 103.530 Will Set the Tone on Monday
- Crude Oil Price Update – Friday’s Plunge Fueled by Futures Contract Expiration
- A Global Shutdown and Continued Spread of the Coronavirus to Overshadow any Stats