EUR/USD Mid-Session Technical Analysis for April 26, 2021

The Euro is drifting lower after touching an eight-week high against the U.S. Dollar on Monday. The single-currency was driven higher earlier in the session amid expectations the U.S. Federal Reserve will maintain its dovish stance at a policy meeting on Tuesday and Wednesday.

The Euro began giving back its earlier gains after the release of a disappointing sentiment survey in Germany. A rise in U.S. Treasury yields also weighed on the common currency.

At 14:39 GMT, the EUR/USD is trading 1.2068, down 0.0029 or -0.24%.

The German Ifo Business Climate report showed German business morale improved by less than expected in April as a third wave of COVID-19 infections and problems with a supply of components in the industrial sector slowed a recovery in Europe’s largest economy.

On Friday, the EUR/USD posted its biggest daily gains since early February after positive data on European services and manufacturing activity lifted sentiment.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the intraday price action suggests momentum may be shifting to the downside.

A trade through the intraday high at 1.2117 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.1994.

The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.2037 to 1.1974 is support.

The main range is 1.1603 to 1.2349. Its retracement zone at 1.1976 to 1.1888 is the primary support area. This area is also controlling the near-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to 1.2098.

Bullish Scenario

A sustained move over 1.2098 will indicate the presence of buyers. Taking out the intraday high at 1.2117 will indicate the buying is getting stronger with 1.2113 the next upside target. This is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to the upside over this level with 1.2243 the primary upside target.

Bearish Scenario

A sustained move under 1.2098 will signal the presence of sellers. The first downside target is 1.2037. If this level fails then look for the selling to possibly extend into 1.1994.

Taking out 1.1994 will change the main trend to down with the next target a support cluster at 1.1976 to 1.1974.

Side Notes

A close under 1.2098 will form a potentially bearish closing price reversal top. If confirmed then look for the start of a 2 to 3 day correction.