EUR/USD Mid-Session Technical Analysis for February 11, 2021

The Euro is trading higher against the U.S. Dollar in a lackluster trade on Thursday. The price action suggests investors are still reacting to Wednesday’s disappointing U.S. consumer inflation report and dovish comments from Fed Chair Jerome Powell.

Adding further to the U.S. Dollar’s weakness is another weaker than expected U.S. weekly initial claims report. However, the Euro’s gains are likely being capped by a report showing Euro Zone growth in 2021 is expected to rebound less than previously expected.

At 15:01 GMT, the EUR/USD is trading 1.2137, up 0.0019 or +0.16%.

On Wednesday, the government reported that U.S. consumer prices rose moderately in January and underlying inflation remained benign as the pandemic continues to be a drag on the labor market and services industry.

The U.S. Dollar is being pressured by lower Treasury yields after Federal Reserve Chairman Jerome Powell struck an overall dovish tone on Wednesday and affirmed that the U.S. central bank will keep interest rates at current levels until the economy has reached maximum employment and inflation stays above 2% for some time.

Finally, the Euro is likely being underpinned today by an earlier report that showed U.S. weekly initial jobless claims pulled back slightly but held at elevated levels last week, and the prior week’s new claims were upwardly revised as the coronavirus pandemic exerted more pressure on the labor market.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the potentially bullish closing price reversal bottom on February 5.

A trade through 1.2190 will change the main trend to up. A move through 1.1952 will negate the closing price reversal bottom and signal the resumption of the downtrend.

The main range is 1.1800 to 1.2349. The EUR/USD is currently trading on the bullish side of its retracement zone at 1.2074 to 1.2010.

The short-term range is 1.2190 to 1.1952. Its retracement zone at 1.2099 to 1.2071 is also support.

The two retracement zones form a support cluster at 1.2074 to 1.2071.

The intermediate range is 1.2349 to 1.1952. Its retracement zone at 1.2151 to 1.2197 is the primary upside target and potential resistance zone. Since the main trend is down, sellers could come in on a test of this area.

Daily Swing Chart Technical Forecast

The price action on Thursday suggests the direction of the EUR/USD into the close will be determined by trader reaction to 1.2151.

Bullish Scenario

A sustained move over 1.2151 will indicate the presence of buyers. This could trigger a surge into the main top at 1.2190, followed closely by the Fibonacci level at 1.2197.

This area is also resistance so watch for sellers. Taking out 1.2197 will be a sign of strength. This is a potential trigger point for an acceleration to the upside with 1.2349 the next likely upside target price.

Bearish Scenario

A sustained move under 1.2151 will signal the presence of sellers. This could trigger a break into 1.2099. If this fails then look for the selling to possibly extend into the support cluster at 1.2074 to 1.2071.