EUR/USD Mid-Session Technical Analysis for December 29, 2020

The Euro is continuing to benefit from the weaker U.S. Dollar on Tuesday, inching closer to the 2-1/2 year high reached late last week. Buyers are being encouraged to buy the riskier currency after the U.S. House of Representatives pushed forward with an enhanced COVID-19 relief package. The new bill is expected to hit the floor of the Republican-led Senate later today, where it is expected to die.

At 13:20 GMT, the EUR/USD is trading 1.2258, up 0.0045 or +0.37%.

The House of Representatives voted on Monday to more than triple stimulus payments to Americans to $2,000 from $600, sending the plan on to the Senate for a vote. The GOP-held Senate may not pass the larger direct payments, though Senate Minority Leader Chuck Schumer has said he will push for a vote.

In other news, the Euro also strengthened as traders digested the EU-UK Brexit trade agreement reached late last week and relieved a ‘no-deal’ had been avoided. Euro bulls also pushed the single currency higher, buoyed by talk of an EU-China trade pact.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the December 25 high at 1.2298 will signal a resumption of the uptrend. After a mostly sideways trade the past two weeks, this move would put the Euro back on track for an eventual test of the April 17, 2018 main top at 1.2413. A move through 1.2059 will change the main trend to down.

The minor trend is also up. A trade through 1.2130 will change the minor trend to down. This will also shift momentum to the downside.

The nearest support is a pair of minor 50% levels at 1.2214 and 1.2179. Both have been tested successfully this week.

Daily Swing Chart Technical Forecast

The early price action indicates that the key level to watch today is the first pivot at 1.2214. This level is controlling the direction of the market.

The first sign of weakness will be a break under 1.2214. This should lead to a test of the next support at 1.2179. The selling could extend into 1.2130 if this price level fails.

On the upside, the nearest target is last week’s high at 1.2298.