EUR/USD Mid-Session Technical Analysis for August 18, 2021

The Euro is edging higher on Wednesday after a failed attempt to trigger a new wave of sell-stops under the March 31 main bottom at 1.1704. The price action is likely being influenced by the relatively light volume ahead of the release of the Federal Reserve Meeting Minutes at 18:00 GMT. Investors are hoping the minutes provide some clues as to the timing of the central bank’s tapering plans.

At 12:25 GMT, the EUR/USD is trading 1.1726, up 0.0016 or +0.14%.

Also helping to support the common currency is a slightly weaker U.S. Dollar. The greenback dipped as risk sentiment improved on Wednesday as stock markets rose, causing some to shed their buys of the safe-haven currency. Nonetheless, gains in the Euro could be limited due to the impact of the spreading Delta variant that is keeping pressure on government bond yields.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 1.1702 will signal a resumption of the downtrend. A move through 1.1805 will change the main trend to up.

The minor range is 1.1805 to 1.1702. Its 50% level at 1.1754 is the nearest upside target and resistance level. Since the main trend is down, sellers are likely to come in on a test of this level.

The short-term range is 1.1909 to 1.1702. Its retracement zone at 1.1806 to 1.1830 is another potential upside target and resistance area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.1710.

Bullish Scenario

A sustained move over 1.1710 will indicate the presence of buyers. If this move is able to attract enough upside momentum then look for a drive into the pivot at 1.1754.

Watch for sellers on the first test of 1.1754. If buyers can overcome this level then look for a possible near-term rally into the resistance cluster at 1.1805 to 1.1806.

Bearish Scenario

A sustained move under 1.1710 will signal the presence of sellers. The first downside target is the intraday low at 1.1702. Look for aggressive counter-trend buyers to vigorously defend this level.

If the selling is strong enough to take out 1.1702 then look for the start of an acceleration to the downside with the November 4, 2020 main bottom at 1.1603 the primary downside target.