EUR/USD Mid-Session Technical Analysis For December 7, 2021
The Euro is trading lower against the U.S. Dollar on Tuesday, hurt by expectations that the U.S. Federal Reserve will tighten policy more quickly than the dovish European Central Bank.
Weak business sentiment in the Euro Zone also pressured the single currency, while hopes that the Omicron variant of COVID-19 would be less severe than previously expected boosted risk appetite and consequently demand for the higher-yielding U.S. Dollar.
In economic news, German investor sentiment deteriorated in December as a fourth wave of COVID-19 infections and persistent supply bottlenecks in manufacturing clouded the growth outlook for Europe’s largest economy, the ZEW survey showed.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1186 will reaffirm the downtrend. A move through 1.1608 will change the main trend to up.
The minor trend is up. A trade through 1.1186 will change the minor trend to down. A move through 1.1383 will reaffirm the uptrend.
The EUR/USD is trading on the weak side of a long-term Fibonacci level at 1.1291, making it resistance. Additional resistance is a 50% level at 1.1397.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1291.
A sustained move under 1.1291 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for an eventual test of 1.1186. This is followed closely by the June 19, 2020 main bottom at 1.1168.
A sustained move over 1.1291 will signal the presence of buyers. If this move creates enough upside momentum then look for a near-term drive into the minor top at 1.1383, followed by the pivot at 1.1397.