EUR/USD Mid-Session Technical Analysis for August 19, 2021

The Euro is down on Thursday against the U.S. Dollar, but well off its lows as Euro Zone government bond yields dropped across the board, tracking U.S. Treasuries, after minutes from a U.S. Federal Reserve meeting showed that the world’s most important central bank is not yet ready to slow down its asset purchases.

At 10:38 GMT, the EUR/USD is trading 1.1694, down 0.0016 or -0.14%.

Minutes from the Federal Reserve’s July meeting showed that policymakers in the United States felt the employment benchmark for decreasing support for the economy could be reached this year, but had not been satisfied.

While inflation in the United States is above target, the Fed’s stance that the maximum-employment goal had not yet been met suggests the timeframe for a tapering announcement is very unlikely to come at the September meeting.

Meanwhile, a drop in demand for risky assets combined with tapering worries and coronavirus fears drove investors into the safety of the U.S. Dollar, weighing on the Euro.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 1.1666 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 1.1666. Its retracement zone at 1.1736 to 1.1752 is potential resistance.

The short-term range is 1.1909 to 1.1666. Its retracement zone at 1.1788 to 1.1816 is another potential upside target.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1711.

Bearish Scenario

A sustained move under 1.1711 will indicate the presence of sellers. If this continue to generate enough downside momentum then look for a retest of the intraday low at 1.1666. Taking out this level could trigger an acceleration to the downside with the November 4 bottom at 1.1603 the next major target.

Bullish Scenario

A sustained move over 1.1711 will signal the presence of counter-trend buyers. If this creates enough upside momentum then look for the buying to possibly extend into 1.1736 to 1.1752. Since the trend is down, look for sellers on the first test of this area.

Overtaking 1.1752 will indicate the short-covering is getting stronger. This could trigger a further rally into 1.1788, followed closely by 1.1805.

Side Notes

A close over 1.1711 will form a closing price reversal bottom on the daily chart. This won’t change the trend to up, but if confirmed, it could trigger the start of a 2 to 3 day counter-trend rally.