EUR/USD Mid-Session Technical Analysis for April 30, 2021

The Euro is trading lower on Friday as month-end profit-taking and weaker than expected economic data weighed on the single currency. The Euro is trading slightly lower for the week after hitting its highest level since February 26 on Thursday and about 3.0% higher for the month.

At 12:13 GMT, the EUR/USD is trading 1.2083, down 0.0037 or -0.31%.

Sellers are reacting to the news that the Euro Zone dipped into a second recession in the first quarter although some see a recovery ahead as vaccinations increase.

The Euro Zone economy slipped into a second technical recession after a smaller than expected contraction in the first quarter, but is now firmly set for a recovery as pandemic curbs are lifted amid accelerating vaccination campaigns, economists said.

The European Union’s statistics office Eurostat said gross domestic product in the 19 countries sharing the Euro contracted 0.6% quarter-on-quarter for a 1.8% year-on-year fall, putting the single currency area in a second technical recession in 12 months. Economists polled by Reuters had expected a 0.8% quarterly and a 2.0% annual decline.

Daily Swing chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has shifted to the downside with the confirmation of yesterday’s closing price reversal top.

A trade through 1.2150 will negate the closing price reversal top and signal a resumption of the uptrend. Taking out 1.2056 will change the main trend to down.

The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.2038 to 1.1974 is potential support. The EUR/USD is currently trading on the strong side of the retracement zone.

The main range is 1.1603 to 1.2349. Its retracement zone at 1.1976 to 1.1888 is the major support. This zone is controlling the near-term direction of the EUR/USD.

A test of the support cluster at 1.1976 to 1.1974 will probably attract new buyers.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday will likely be determined by trader reaction to 1.2102.

Bearish Scenario

A sustained move under 1.2102 will indicate the presence of sellers. The first downside target is 1.2056, followed by 1.2038. The latter is a potential trigger point for an acceleration into 1.1994, followed by 1.1976.

Bullish Scenario

A sustained move over 1.2102 will signal the presence of buyers. The first upside target is 1.2150.

Taking out 1.2150 will signal a resumption of the uptrend. This could trigger an acceleration into the February 25 top at 1.2243.