EUR/USD Mid-Session Technical Analysis for December 2, 2020

The Euro is trading slightly lower against the U.S. Dollar at the mid-session on Wednesday after giving back earlier gains. The current price action suggests a potentially bearish closing price reversal top may be forming. This isn’t a trend changing event, but it could be an indication that the selling is greater than the buying at current price levels. Time has also put the Euro inside the window of time for a reversal.

At 15:38 GMT, the EUR/USD is trading 1.2066, down 0.0003 or -0.02%.

In other news, Euro Zone producer prices rose more than expected month-on-month in October and unemployment fell as the economy continued to recover before the second wave of the COVID-19 pandemic struck, data showed Wednesday.

German government bond yields held steady on Wednesday, as expectations of fresh easing measures by the ECB offset a boost in risk sentiment triggered by hopes of a quick approval of a coronavirus stimulus plan in the United States.

In the U.S., private payrolls grew at their slowest pace since July amid a deceleration in large business hiring for November, ADP’s monthly payrolls report said Wednesday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high, however, there wasn’t much of a follow-through to the upside, and indicating momentum may be slowing.

An intraday trade through 1.2088 will indicate the buying is getting stronger. The main trend will change to down on a move through 1.1800.

The EUR/USD is also up seven sessions from its last swing bottom. This puts it inside the window of time for a closing price reversal top.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to yesterday’s close at 1.2069.

Bullish Scenario

A sustained move over 1.2069 will indicate the presence of buyers. This could lead to a retest of the intraday high at 1.2088. Taking it out could create the upside momentum needed to challenge the April 30, 2018 main top at 1.2138.

Bearish Scenario

A sustained move under 1.2069 will put the EUR/USD in a position to form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day counter-trend sell-off with the next potential downside target 1.1944 to 1.1910.

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