EUR/USD Mid-Session Technical Analysis for April 14, 2021
The Euro is trading slightly higher on Wednesday after giving back most of its earlier gains. The common currency is being supported by a weaker U.S. Dollar that was pressured by a drop in Treasury yields following Tuesday’s U.S. consumer inflation report.
The report showed that inflation came in stronger than expected, but investors weren’t rattled enough to send yields higher, suggesting that they expected the news. Furthermore, the Fed has been telling us that we should expect a “transitory” rise in inflation.
At 11:45 GMT, the EUR/USD is trading 1.1957, up 0.0008 or +0.07%. This was down from an intraday high of 1.1973.
In other news, Euro Zone industrial output declined as expected in February after expansion in January, dampening prospects for economic growth in the first quarter after a solid end to 2020 for manufacturers.
Additionally, Euro Zone government bond yields fell on Wednesday, tracking their U.S. counterparts lower, after solid demand for a Treasury auction in the United States underpinned bond markets.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1989 will change the main trend to up. Taking out the next main top at 1.1990 will indicate the buying is getting stronger.
A move through 1.1704 will signal a resumption of the downtrend. This is highly unlikely, but the EUR/USD is up 10 sessions from its last main bottom, which puts it inside the window of time for a closing price reversal top.
The minor trend is up. It changed to up earlier today when buyers took out 1.1947. This confirmed the shift in momentum.
The main range is 1.1603 to 1.1249. The EUR/USD is currently testing its retracement zone at 1.1976 to 1.1888. This zone is controlling the near-term direction of the Forex pair.
The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.1974 to 1.2037 is the primary upside target and potential resistance area.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD is likely to be determined by trader reaction to 1.1976.
A sustained move over 1.1976 will indicate the presence of buyers. The first targets are 1.1989 and 1.1990. Taking out the latter could drive the EUR/USD into 1.2037. This is a potential trigger point for an acceleration to the upside.
A sustained move under 1.1976 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible break into the main Fibonacci level at 1.1888. This is a potential trigger point for an acceleration to the downside.
For a look at all of today’s economic events, check out our economic calendar.