EUR/USD Mid-Session Technical Analysis for August 20, 2020

The Euro is inching higher against the U.S. Dollar on Thursday as traders try to claw back some of yesterday’s steep decline. On Wednesday, the single-currency plunged after less dovish than expected minutes from last month’s U.S. Federal Reserve policy meeting prompted some Euro bulls to book profits and reduce overextended positions.

At 12:27 GMT, the EUR/USD is trading 1.1844, up 0.0005 or +0.04%.

With long bets approaching historical extremes and a resurgence of COVID-19 cases in Germany and Spain, investors may be turning less bullish on the Euro.

Additionally, Deutsche Bank analysts said the recent rise of the Euro against the dollar was probably running out of steam.

“With the EUR/USD having (nearly just) reached our 1.20 target earlier this week we now favor taking profit and see a more balanced outlook as we approach September”, they told their clients.

Daily Swing Chart Technical Analysis

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

The first minor range is 1.1696 to 1.1966. The EUR/USD is currently straddling its pivot at 1.1831. This level could be controlling the short-term direction of the Forex pair.

The second minor range is 1.1371 to 1.1966. If the main trend changes to down then look for the selling to possibly extend into the retracement zone at 1.1668 to 1.1598.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the first minor pivot at 1.1831.

Bullish Scenario

A sustained move over 1.1831 will indicate the presence of buyers. The first upside objective is 1.1890. Overcoming this level will indicate the buying is getting stronger with the next target 1.1966.

Bearish Scenario

A sustained move under 1.1831 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target the main bottom at 1.1711.