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EUR/USD Mid-Session Technical Analysis for December 6, 2021

By:
James Hyerczyk
Published: Dec 6, 2021, 14:04 UTC

The direction of the EUR/USD is likely to be determined by trader reaction to 1.1291.

EUR/USD

In this article:

The Euro is edging lower on Monday as a rebound in risk sentiment boosted demand for the U.S. Dollar. Weaker than expected data out of Germany is weighing on prices while investors continue to monitor the omicron COVID-19 variant and the Federal Reserve’s potential policy tightening. A rise in U.S. Treasury yields is also helping to make the dollar a more attractive asset.

At 13:41 GMT, the EUR/USD is trading 1.1296, down 0.0014 or -0.12%. On Friday, the Invesco CurrencyShares Euro Trust (FXE) ETF settled at 105.20.

In economic news, weaker demand from abroad drove a much bigger than expected drop in German industrial orders, including cars, in October, data showed on Monday, further clouding the growth outlook for manufacturers in Europe’s largest economy.

Orders for goods ‘Made in Germany’ dropped 6.9% on the month in seasonally adjusted terms after a revised rise of 1.8% in September and a plunge of 8.8% in August, figures from the Federal Statistics Office showed. A Reuters poll of analysts had pointed to a smaller decline of 0.5% on the month in October.

Market expectations have grown for the Fed to zero in on combating inflation, following increasingly hawkish comments from policymakers.

Meanwhile the omicron variant has now been detected in almost one third of U.S. states, health officials said on Sunday, although the delta variant remains the dominant strain behind rising caseloads nationwide.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1186 will signal a resumption of the downtrend. A move through 1.1608 will change the main trend to up.

The minor trend is up. This is controlling the momentum. A move through 1.1383 will indicate the counter-trend buying is getting stronger.

The EUR/USD is currently straddling a long-term Fibonacci level at 1.1291.

On the upside, the nearest resistance targets are 1.1397 and 1.1439.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a near-term move into 1.1283 to 1.1397.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. The first two downside targets are 1.1185 and 1.1261. The latter is a potential trigger point for an acceleration into the main bottom at 1.1186, followed by the June 19, 2020 main bottom at 1.1168.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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