EUR/USD Forex Technical Analysis – Trend Changes to Down on Trade Through 1.2054

The Euro moved lower against the U.S. Dollar on Wednesday as the risk of extended lockdowns in Europe to combat the spread of COVID-19 and worries about the pace the rollout of vaccines weighed on the common currency.

European countries are struggling to contain the contagion of the coronavirus amid worries that a new variant of the virus could lead to more stringent lockdowns and more economic pain.

At 21:30 GMT, the EUR/USD is trading 1.2107, down 0.0022 or -0.18%.

The move is taking place ahead of Thursday’s European Central Bank meeting, which, after the broad easing of monetary policy last month, is unlikely to produce any major change.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2054 will change the main trend to down. A move through 1.2349 will signal a resumption of the uptrend.

The main range is 1.1800 to 1.2349. Its 50% level at 1.2074 provided support on Tuesday and Wednesday. It is controlling the near-term direction of the EUR/USD.

The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is the primary upside target. Sellers could come in on a test of this level. They will be trying to form a secondary lower top.

Short-Term Outlook

The price action on Monday through Wednesday indicates the direction of the EUR/USD the rest of the week will likely be determined by trader reaction to 1.2074.

Bullish Scenario

A sustained move over 1.2074 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into 1.2202 to 1.2236 over the short-run.

Bearish Scenario

A sustained move under 1.2074 will signal the presence of sellers. Taking out 1.2054 will change the main trend to down. This move could trigger a further break into 1.2025. This price is a potential trigger point for an acceleration to the downside with the next major target the November 23 main bottom at 1.1800.