EUR/USD Mid-Session Technical Analysis for December 9, 2021

The Euro is trading lower against the U.S. Dollar on Thursday as Euro Zone government bond yields fell after more indications about the next moves from the European Central Bank (ECB), while worries about the new coronavirus variant continued to weigh on market sentiment. Meanwhile, investors were shifting their focus to U.S. inflation data due on Friday and next week’s central bank policy meetings.

At 12:56 GMT, the EUR/USD is at 1.1312, down 0.0032 or -0.28%. On Wednesday, the Invesco CurrencyShares Euro Trust (FXE) ETF settled at $105.56, up $0.78 or +0.74%.

European Central Bank policymakers are homing in on a temporary increase in the regular bond purchase scheme that would still significantly reduce overall debt buying once a much larger pandemic-fighting scheme ends in March, sources told Reuters.

The U.S. Federal Reserve will raise rates in the third quarter of next year, earlier than expected a month ago, according to economists in a Reuters poll who mostly said the risk was that a hike comes even sooner.

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 trade through 1.1383 will signal a resumption of the minor trend. A move through 1.1228 will change the minor trend to down.

The main support is the long-term Fibonacci level at 1.1291. On the upside, the nearest resistance is a pair of 50% levels at 1.1397 and 1.1439.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1306.

Bullish Scenario

A sustained move over 1.1306 will indicate the presence of buyers. Taking out 1.1355 will indicate the buying is getting stronger with the next targets the minor top at 1.1383, followed by the first pivot at 1.1397.

Bearish Scenario

A sustained move under 1.1306 will signal the presence of sellers. This could trigger a break into the long-term Fibonacci level at 1.1291.

Taking out 1.1291 could trigger an acceleration into the new minor bottom at 1.1228.