EUR/USD Mid-Session Technical Analysis for December 1, 2020

The Euro is trading close to a three-month high on Tuesday against the U.S. Dollar on expectations of more monetary stimulus from the U.S. Federal Reserve and a strengthening recovery, especially in Asia, that is driving up demand for riskier assets.

At 15:35 GMT, the EUR/USD is trading 1.2008, up 0.0052 or +0.43%.

In other news, Euro Zone inflation remained in negative territory for the fourth straight month in November, reinforcing European Central Bank concerns that the dip in prices may be more persistent than feared as deflationary forces intensify amid a deep recession.

With the Euro Zone heading back into recession in the fourth quarter, the ECB has already flagged more stimulus at its December meeting, making the case for more emergency bond buys and cheap liquidity to banks, leaving policymakers only to debate the details of the package.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the September 1 main top at 1.2011 will signal a resumption of the uptrend. The main trend will change to down on a trade through 1.1800.

The minor support is a retracement zone at 1.1902 to 1.1878.

The short-term support zone is 1.1855 to 1.1807.

Daily Swing Chart Technical Forecast

Traders will be keying in on 1.2011 throughout the session on Tuesday. This is a potential trigger point for an acceleration to the upside since there is no true resistance until about 1.2500.

If there is no acceleration then we could see grinding price action since the ECB has expressed concerns about the rise in the Euro. This could cause buyers to take a tentative approach to any breakout.

Taking out 1.2011 then breaking back under it will be a sign that the buying is just not that strong and that buyers are reluctant to chase the Euro higher at current price levels, given that the ECB is poised to announce a new stimulus package in just a matter of weeks.

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