EUR/USD Mid-Session Technical Analysis for Decembe 8, 2020

The Euro is trading higher against the U.S. Dollar on Tuesday, boosted by upbeat economic sentiment data from Germany and expectations of additional stimulus from the U.S. government. Gains were muted, however, as Brexit talks went down to the wire.

At 15:09 GMT, the EUR/USD is trading 1.2120, up 0.0005 or +0.04%.

German investor sentiment soared more than expected in December on expectations that vaccines against the coronavirus would boost the outlook for Europe’s largest economy, a survey showed.

The ZEW economic research institute said its survey of investors’ economic sentiment moved up to 55.0 from 39.0 in the previous month. A Reuters poll had forecast a reading of 45.5.

The data helped the Euro stay higher to the dollar, although third-quarter gross domestic product figures for the Euro Zone were revised.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since Friday, following the formation of a closing price reversal top.

A trade through 1.2178 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through 1.2079 will indicate the selling pressure is getting stronger.

The minor range is 1.2178 to 1.2079. Its 50% level at 1.2129 is controlling the price action today.

The short-term range is 1.1800 to 1.2178. Its retracement zone at 1.1989 to 1.1944 is the primary downside target. A test of this area will fulfill the objective of the closing price reversal top chart pattern.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday will be determined by trader reaction to 1.2129.

Bearish Scenario

A sustained move under 1.2129 will indicate the presence of sellers. The first downside target is 1.2079. Taking out this level could trigger an acceleration to the downside or the start of a gradual break into the short-term retracement zone at 1.1989 to 1.1944.

Bullish Scenario

A sustained move over 1.2129 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the closing price reversal top at 1.2178.

Taking out 1.2178 could trigger an acceleration to the upside. The daily chart shows no visible resistance until the April 17, 2018 main top at 1.2413.