EUR/USD Mid-Session Technical Analysis for December 23, 2021

The Euro is edging lower on Thursday after failing to follow-through to the upside following yesterday’s strong performance. Investors blamed the price action on low holiday volume and position-squaring ahead of the long holiday weekend. Some even blamed the “virus-on, virus-off” scenario for the volatile trade.

At 12:50 GMT, the EUR/USD is trading 1.1308, down 0.0021 or -0.18%. On Wednesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $105.42, up $0.49 or +0.47%.

In domestic economic news, prices of imports to Germany in November have risen by almost 25% compared to the same month a year ago. The hike is being mostly attributed to global trade disruptions caused by the COVID pandemic.

In the U.S., traders will get a chance to react to the Core PCE Price Index report at 13:30 GMT. It is expected to show an increase of 0.4%. Weekly Unemployment Claims are expected to come in at 200K and Revised University of Michigan Consumer Sentiment is expected to remain flat at 70.4.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1383 will change the main trend to up. A move through 1.1186 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A move through 1.1360 will indicate the buying is getting stronger. A trade through 1.1234 will change the minor trend to down.

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

If the main trend changes to up, the first target will be the 50% level at 1.1397.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to the Fibonacci level at 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. If this creates enough momentum over the near-term, look for a surge into 1.1360.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers with potential near-term downside targets coming in at 1.1224 and 1.1222.