EUR/USD Mid-Session Technical Analysis for December 18, 2020

The Euro is trading sideways to lower against the U.S. Dollar after a week of gains that pushed the single-currency to its highest level in two and half years as demand for riskier assets eased. The price action suggests there are some concerns over Brexit and the negotiations in Washington over a new fiscal stimulus coronavirus-aid deal.

At 14:57 GMT, the EUR/USD is trading 1.2238, down 0.0033 or -0.27%.

The price action also suggests we could be looking at profit-taking and position-squaring ahead of next week’s holiday-shortened trade.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2273 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.2059.

The market is currently posting an inside move, which tends to suggest investor indecision and impending volatility.

The short-term range is 1.2059 to 1.2273. Its 50% level at 1.2166 is the primary downside target.

Daily Swing Chart Technical Forecast

Momentum took the EUR/USD higher and the lack of upside momentum could take it lower without necessarily indicating a change in trend.

Bullish Scenario

A sustained move over 1.2273 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the April 17, 2018 main top at 1.2413 over the near-term.

Bearish Scenario

A sustained move under 1.2273 will signal the presence of sellers, but the move will be meaningless unless the selling is strong enough to take out yesterday’s low at 1.2190. A trade through this level will make 1.2273 a new minor top. This will be the first sign that the selling is greater than the buying at current price levels.

A test of 1.2166 will indicate a normal correction is taking place. Buyers may even step in since the main trend is up, but if it fails as support, we could see an even steeper break with the next potential targets 1.2059 and 1.2037.

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