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EUR/USD Mid-Session Technical Analysis for August 10, 2021

By:
James Hyerczyk
Published: Aug 10, 2021, 13:30 UTC

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1736.

EUR/USD

In this article:

The Euro hit a four-month low versus the U.S. Dollar on Tuesday after upbeat U.S. jobs data bolstered expectations that the Federal Reserve could soon start tapering its massive bond-buying program.

The early price action indicates the greenback is getting support from rising U.S. Treasury yields, as the prospect of reduced Fed stimulus weakened bond prices.

Traders are also looking toward Wednesday’s consumer inflation (CPI) report although the main focus for the Fed and investors is the U.S. labor market.

At 13:02 GMT, the EUR/USD is trading 1.1719, down 0.0017 or -0.14%.

In other news, government bond yields in Germany, the Euro Zone’s benchmark bond issuer, held above recent six-month lows on Tuesday as talk that the U.S. Federal Reserve could soon discuss tapering its bond buying stimulus kept bond market bulls in check for now.

Investor sentiment in Germany deteriorated for the third month in a row in August on fears that rising COVID-19 infections and a fourth wave of coronavirus cases could hold back the recovery in Europe’s largest economy, a survey showed on Tuesday.

The ZEW economic research institute said its survey of investors’ economic sentiment fell to 40.4 from 63.3 points in the previous month. A Reuters poll had forecast a fall to 56.7.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the previous day’s low. The next downside target is the March 31 main bottom at 1.1704.

A trade through 1.1909 will change the main trend to up. This is highly unlikely but the EUR/USD down seven sessions from its last main top, it is currently inside the window of time for a potentially bullish closing price reversal bottom.

The short-term range is 1.1909 to 1.1713. This makes its retracement zone at 1.1811 to 1.1834 the nearest resistance. This zone will move lower as the price drops.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1736.

Bearish Scenario

A sustained move under 1.1736 will indicate the presence of sellers. Taking out the intraday low at 1.1712 will indicate the selling pressure is getting stronger. This could lead to a test of the March 31 main bottom at 1.1704.

Watch for a technical bounce on the first test of 1.1704. If this level is taken out then look for a possible acceleration to the downside with 1.1603 the next potential downside target.

Bullish Scenario

A sustained move over 1.1704 will signal the presence of buyers. This could trigger an intraday short-covering rally.

A close over 1.1704 will form a closing price reversal bottom on the daily chart. If confirmed, this could trigger the start of a 2 to 3 day rally with 1.1811 the first potential upside target.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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