EUR/USD Mid-Session Technical Analysis for December 14, 2021

The Euro is trading higher against the U.S. Dollar on Tuesday despite expectations of a hawkish Federal Reserve meeting and continued uncertainty about the Omicron coronavirus variant that created some demand for the safe-haven greenback.

At 11:49 GMT, the EUR/USD is trading 1.1322, up 0.0035 or +0.31%. On Monday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $104.97, down $0.28 or -0.27%.

The single-currency recovered from early session weakness even though Germany’s Ifo Institute on Tuesday predicted the German economy to shrink by 0.5% quarter-on-quarter in the final three months of this year and to stagnate in the first three months of next year.

The Federal Reserve begins a two-day meeting later in the day with futures traders indicating a central bank rate hike by June.

Daily Swing Chart Technical Analysis

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

The minor trend is up. This is controlling the momentum. A trade through 1.1355 will indicate the buying is getting stronger. A move through 1.1260 will change the minor trend to down.

The EUR/USD is currently trading on the strong side of a major Fibonacci level at 1.1291, making it support.

On the upside, the nearest resistance is a pair of 50% levels at 1.1397 and 1.1439.

Daily Swing Chart Technical Forecast

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

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the rally to possibly extend into the minor top at 1.1355.

Overtaking 1.1355 will indicate the buying is getting stronger. This could trigger a further rally into another minor top at 1.1383, followed by a minor pivot at 1.1397.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. Taking out the minor bottom at 1.1260 will indicate the selling pressure is getting stronger with the next minor support coming in at 1.1228.

If 1.1228 fails as support then look for a break into the main bottom at 1.1186, followed by the June 19, 2020 main bottom at 1.1168.