EUR/USD Mid-Session Technical Analysis for August 18, 2020

The Euro is trading flat against the U.S. Dollar on Wednesday as investors waited for Euro Zone inflation data and U.S. Federal Reserve minutes.

Euro Zone HICP data for July is due at 09:00 GMT. Economists polled by Reuters expect it to be at -0.3%, down from 0.3% the previous month.

The five-year, five-year breakeven inflation forward (a key market gauge of inflation expectations, which is watched by the European Central Bank) edged down further from its 6-month highs hit last week.

At 07:58 GMT, the EUR/USD is trading 1.1937, up 0.0002 or +0.02%.

The FOMC’s last meeting minutes will be released at 18:00 GMT, offering an insight into the central bank’s deliberating process as it looks to shore up the economy in the wake of the pandemic.

Most analysts agree the Fed is not expected to indicate any new monetary stimulus initiatives in the minutes, however, investors will be watching for any change to the Fed’s approach to inflation that could be negative for the dollar. This could spike the EUR/USD higher.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1966 will reaffirm the uptrend. The main trend will change to down on a move through 1.1711.

The minor range is 1.1711 to 1.1966. Its retracement zone at 1.1839 to 1.1808 is the first support.

The second minor range is 1.1371 to 1.1966. If the main trend changes to down then its retracement zone at 1.1668 to 1.1598 will become the next downside target zone.

Daily Swing Chart Technical Forecast

Dovish Fed minutes could trigger a breakout through 1.1966 then the May 14, 2018 main top at 1.1998. The latter is a potential trigger point for an acceleration to the upside.

The only pattern bullish traders have to worry about is a higher-high, lower close. This won’t change the trend to down, but it could trigger the start of a 2 to 3 day correction.

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