Yahoo Finance EUR/USD Trading Inside Major Retracement Zone With 1.2164 Key Support, 1.2597 Upside Target
The EUR/USD rose sharply on Wednesday ahead of today’s European Central Bank monetary policy statement and ECB President Mario Draghi’s press conference. The price action suggests that investors believe the central bank will make hawkish comments about ending its current stimulus program sooner than previously expected.
The single-currency was also driven higher by dovish comments about the U.S. Dollar by Treasury Secretary Steven Mnuchin. He “jawboned” the greenback by saying he “welcomed” a weaker U.S. Dollar.
“Obviously a weaker U.S. Dollar is good for us as it relates to trade and opportunities,” Mr. Mnuchin told reporters at the Davos Forum.
Daily Swing Chart Analysis
The main trend is up according to the daily swing chart. The uptrend resumed on Wednesday when aggressive buyers took out the January 17 main top at 1.2323.
The new swing bottom is 1.2164. A trade through this level will change the main trend to down.
Daily Swing Chart Forecast
The major trading range is formed by the main top at 1.3993 and the main bottom at 1.0339. Its 50% to 61.8% retracement zone is 1.2166 to 1.2597. The EUR/USD is currently testing this zone. It is controlling the longer-term direction of the market.
The sustained move over the 50% level at 1.2166 is giving the Euro a strong upside bias. This level is new support. If the upside momentum continues then look for a drive into the December 16, 2014 main top at 1.2569, followed closely by the Fibonacci level at 1.2597.
Not only will taking out 1.2166 signal the return of sellers, but it is likely to create the downside momentum needed to change the main trend to down on a move through 1.2164.
This article was originally posted on FX Empire
