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EUR/USD Mid-Session Technical Analysis for March 4, 2021

The Euro is trading lower against the U.S. Dollar on Thursday ahead of a speech by Federal Reserve Chairman Jerome Powell at 17:05 GMT that could set the near-term tone in the currency markets. Traders are also reacting to weaker than expected economic data out of the Euro Zone.

At 14:11 GMT, the EUR/USD is trading 1.2038, down 0.0025 or -0.21%.

EUR/USD investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and if there is any change in his assessment of the economy before the Fed’s next meeting ending March 17.

In economic news, Euro Zone Retail Sales fell far sharper than expected in January as shuttered stores due to coronavirus restrictions and muted winter sales suppressed consumer spending except for food and online.

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EU statistics agency Eurostat said on Thursday that retail sales were down 5.9% month-on-month in January and by 6.4% year-on-year. That compared with the average forecast declines in a Refinitiv poll of 1.1% and 1.2% respectively.

Daily EUR/USD
Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending lower. A trade through 1.1952 will change the main trend to down. The uptrend will resume on a move through 1.2243.

The minor trend is down. This is controlling the momentum. The minor trend will change to up on a move through 1.2113. A trade through 1.1992 will indicate the selling pressure is getting stronger.

The main range is 1.1800 to 1.2349. The EUR/USD is currently trading inside its retracement zone at 1.2074 to 1.2010. This area is controlling the near-term direction of the Forex pair.

The short-term range is 1.2349 to 1.1952. Its retracement zone at 1.2151 to 1.2197 is resistance.

The minor range is 1.2243 to 1.1992. Its 50% level at 1.2118 stopped the rally on Wednesday.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the EUR/USD into the close on Thursday will be determined by trader reaction to 1.2074.

Bearish Scenario

A sustained move under 1.2074 will indicate the presence of sellers. The first downside target is 1.2010, followed closely by 1.1992. If this level fails then look for the selling to possibly extend into the main bottom at 1.1952. Taking out this level will change the main trend to down. This could trigger an acceleration to the downside.

Bullish Scenario

A sustained move over 1.2074 will signal the presence of buyers. The first upside target is 1.2113 to 1.2118. Overtaking the latter could trigger a further move into 1.2151 to 1.2197.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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