EUR/USD Mid-Session Technical Analysis for December 30, 2020

The Euro is trading higher on Wednesday while rapidly approaching its highest level in 2-1/2 years reached on December 25 under extremely thin holiday trading conditions. The move by the single-currency is being fueled by overall weakness in the U.S. Dollar, which sunk as demand for riskier assets tarnished its appeal as a safe-haven currency.

At 13:33 GMT, the EUR/USD is trading 1.2284, up 0.0032 or +0.26%.

Investors are also looking past the latest delay in U.S. fiscal stimulus and bet that global market risk appetite would increase in 2021.

U.S. Senate Majority Leader Mitch McConnell on Tuesday blocked a vote on increasing COVID-19 relief payments to $2,000, adding another delay to fractious negotiations over fiscal stimulus, Reuters wrote.

But market sentiment was upbeat as investors remained optimistic that a fiscal stimulus deal will be eventually reached, lessening demand for the safe-haven U.S. Dollar, and driving up demand for the higher risk Euro.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2298 will signal a resumption of the uptrend. The main trend changes to down on a move through 1.2059.

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

The first support is a minor 50% level at 1.2214. The second support level is another minor 50% level at 1.2179.

Daily Swing Chart Technical Forecast

The EUR/USD is being driven by momentum on Wednesday. If the upside momentum continues then look for a potential breakout over 1.2298. Due to the low volume, we may not see much of a follow-through move.

If the Senate approves the additional stimulus then look for the rally to possibly extend into the April 17, 2018 main top at 1.2413. This could occur with or without a jump in volume.

A failure to take out 1.2298 or turning lower for the session will indicate the presence of sellers. If the EUR/USD forms a closing price reversal top then look for the start of a possible short-term correction next week.

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