EUR/USD Forex Technical Analysis – Strengthens Over 1.1291, Weakens Under 1.1284

The Euro is trading flat early Monday. The relatively low volume suggests the Forex market is stuck in holiday mode following the long Christmas break. There are no major economic reports due from the Euro Zone or the United States, perhaps encouraging the major trading banks and institutions to remain on the sidelines. Furthermore, we have the upcoming New Year’s holiday next weekend could mean volume will remain below average throughout the week.

At 04:43 GMT, the EUR/USD is trading 1.1319, unchanged. Last Thursday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $105.38, down $0.06 or -0.06%.

Besides the light volume, there is some uncertainty over the economic impact of the Omicron coronavirus variant in Asia, which could spread to the European and U.S. markets later in the day. This is likely weighing on investor sentiment.

Euro traders will be paying close attention to the price action in the U.S. Dollar. If investor sentiment continues to weaken then investors may move into the greenback for safe-haven protection. This would put pressure on the common currency.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1383 will change the main trend to up. A move through 1.1186 will reaffirm the downtrend.

The EUR/USD is currently trading on the strong side of a long-term Fibonacci level at 1.1291. This level is controlling the near-term direction of the single-currency.

On the upside, the nearest resistance is a minor pivot at 1.1397, followed by another minor pivot at 1.1439 and a long-term 50% level at 1.1493.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the minor top at 1.1360, followed by the main top at 1.1383.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. The first target is a minor pivot at 1.1284. Taking out this level could trigger the start of a break into a minor bottom at 1.1222.