EUR/USD Mid-Session Technical Analysis for December 13, 2021

The Euro is edging lower against the U.S. Dollar at the start of the week in which the European Central Bank (ECB), the U.S. Federal Reserve and the Bank of England (BOE) are all due to meet and possibly signal a tightening of policy in the face of strong inflation.

But growing Omicron infections in Europe and the United States complicate matters and are likely to trigger some caution as policymakers either side of the Atlantic prepare to signal or hint at an end to pandemic-era measures.

At 15:02 GMT, the EUR/USD is trading 1.1286, down 0.0031 or -0.27%. The Invesco CurrencyShares Euro Trust (FXE) is at 104.95, down $0.37 or -0.35%.

The Fed is likely to be the main driver of the price action with traders expecting policymakers to announce a tapering of bond purchases earlier than previously expected, while the ECB could provide more detail on how it will unwind its pandemic emergency purchase programme (PEPP), due to end in March.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending lower. A trade through 1.1186 will signal a resumption of the downtrend. A move through 1.1608 will change the main trend to up.

The minor trend is up. A trade through 1.1228 will change the minor trend to down. A move through 1.1383 will indicate the buying is getting stronger.

The market is currently straddling a long-term Fibonacci level at 1.1291. This level is controlling the near-term direction of the EUR/USD.

On the upside, resistance is a series of pivots layered at 1.1397, 1.1439 and 1.1493.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to 1.1291.

Bearish Scenario

A sustained move under 1.1291 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 1.1228.

Taking out 1.1228 will indicate the selling pressure is getting stronger with the first target the November 24 main bottom at 1.1186, followed by the June 19, 2020 main bottom at 1.1168.

Bullish Scenario

A sustained move over 1.1291 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into 1.1355. Taking out this level could extend the rally into 1.1383, followed by 1.1397.