The Euro continues to surge late in the trading session on Friday with most of the rally fueled by a weaker U.S. Dollar. The greenback was on track for its biggest weekly decline in more than a decade on Friday, as trillions of worth of stimulus efforts by governments and central banks helped temper a rout in global markets triggered by the coronavirus pandemic. The Euro is on track for an almost 3% gain over the dollar this week.
At 19:42 GMT, the EUR/USD is trading 1.1123, up 0.0088 or +0.80%.
Also pressuring the dollar and helping to boost the Euro is the news that the House passed a $2 trillion coronavirus relief bill on Friday, sending the unprecedented measure to President Donald Trump’s desk after a scramble to block an effort to delay its passage. This bill puts more cash into the economy which weakens the dollar.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at 1.0636 on March 23.
A trade through 1.0636 will negate the chart pattern and signal a resumption of the downtrend. The main trend will change to up on a move through 1.1496.
The minor trend will change to up on a move through 1.1237. This will confirm the change in momentum.
The short-term range is 1.1496 to 1.0636. The EUR/USD is currently testing its retracement zone at 1.1066 to 1.1167. This zone is the primary upside target of the closing price reversal bottom. Trader reaction to this area will determine the near-term direction of the Forex pair.
If the upside momentum continues into the close on Friday the look for the rally to possibly extend into the short-term Fibonacci level at 1.1167. This is followed by a downtrending Gann angle at 1.1216.
If the downside momentum resumes then look for a break back to the short-term 50% level at 1.1066. If this fails then look for the selling pressure to continue into the steep uptrending Gann angle at 1.0956. This angle has been guiding the EUR/USD higher for four consecutive sessions.
Over the short-run, look for the EUR/USD to strengthen on a sustained move over 1.1167, and weaken on a sustained move under 1.1066.