EUR/USD Mid-Session Technical Analysis for December 23, 2020

The Euro is edging higher against the U.S. Dollar in a lackluster trade on Wednesday. The price action suggests many of the major players have moved to the sidelines ahead of the Christmas and New Year holidays. The early movement also indicates that traders have shrugged off U.S. President Donald Trump’s threat to block an $892 billion COVID-19 aid package

At 13:59 GMT, the EUR/USD is trading 1.2174, up 0.0010 or +0.08%.

Late Tuesday, Trump said the long-awaited stimulus package should be amended to increase the amount in the stimulus checks – potentially disrupting the bill. However, traders showed little reaction to the “soft” threat from Trump because they realized that his veto would be overridden in the House and the Senate.

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, while a move through 1.2059 will change the main trend to down.

Support and resistance are being provided by a pair of 50% levels at 1.2166 and 1.2202 respectively.

The short-term range is 1.1800 to 1.2273. Its 50% level at 1.2037 is key support and a potential value area should there be a steep sell-off over the near-term.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.2166 and 1.2202.

Bearish Scenario

A sustained move under 1.2166 will indicate the presence of sellers. This could trigger a break into 1.2130. If this level fails then look for the selling to possibly extend into the main bottom at 1.2059 over the near-term, followed closely by 1.2037.

Bullish Scenario

A sustained move over 1.2202 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into 1.2273 over the near-term.

Taking out 1.2273 could trigger an acceleration to the upside. Barring any negative comments about valuations from European Central Bank officials, our objective remains the April 17, 2018 main top at 1.2413. Helping the EUR/USD reach this level will be additional stimulus from the Biden Administration early next year.

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