EUR/USD Main Trend Turned Up with 1.1516 Next Target

The Euro is trading higher against the U.S. Dollar at the mid-session on Thursday after clawing back earlier losses. The single-currency fell initially after a reading of U.S. consumer prices on Thursday came in higher than expected, pushing the greenback up as the data suggested the Federal Reserve could be more aggressive in fighting rising inflation.

At 16:18 GMT, the EUR/USD is trading 1.1488, up 0.0065 or +0.57%. The Invesco CurrencyShares Euro Trust EFT (FXE) is at $106.65, up $0.54 or +0.51%.

The U.S. consumer price index rose 0.6% for January, one-tenth of a percentage point higher than expected, while year-over-year CPI rose 7.5%, or two-tenths more than economists polled by Reuters had expected.

The Euro is up against the U.S. Dollar despite a jump in U.S. Treasury yields on Thursday. The benchmark 10-year rate breached the 2% level for the first time since August 2019.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Thursday when buyers took out the pair of swing tops at 1.1483. The new main bottom is 1.1375. A trade through this level will change the main trend to down.

The intermediate range is 1.1693 to 1.1122. The EUR/USD is currently trading inside its retracement zone at 1.1475 to 1.1407.

The main range is 1.1909 to 1.1122. The next upside target is its retracement zone at 1.1516 to 1.1608.

The minor range is 1.1375 to 1.1495. Its pivot at 1.1435 is potential support.

The short-term range is 1.1122 to 1.1495. Its retracement zone at 1.1303 to 1.1260 is the best support area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Thursday is likely to be determined by trader reaction to 1.1475.

Bullish Scenario

A sustained move over 1.1475 will indicate the presence of buyers. The first upside target is 1.1516. Taking out this level could trigger a near-term acceleration into 1.1608.

Bearish Scenario

A sustained move under 1.1475 will signal the presence of sellers. The first downside target is 1.1435. If this fails then look for the selling to possibly extend into 1.1407, followed by 1.1375.