EUR/USD Mid-Session Technical Analysis for February 3, 2021

The Euro fell to its lowest level since December 1 on Wednesday as investors looked to a widening disparity between the strength of the U.S. and European pandemic recoveries. Translation:  traders are betting on a speedier recovery in the United States than in the Euro Zone, making the greenback a more attractive asset.

According to Reuters, the view was bolstered by moves in Washington toward fast-tracking more stimulus spending, in contrast with concerns about extended European lockdowns and expectations for a decline in Euro Zone growth this quarter.

At 13:30 GMT, the EUR/USD is trading 1.2014, down 0.0029 or -0.24%.

In economic news, the ADP Non-Farm Employment Change report showed the U.S. private sector added 174,000 jobs in January. This is well above the 48,000 forecast. Additionally, December’s dismal report was revised to -78,000.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the previous day’s low.

A trade through 1.2190 will change the main trend to up. This is highly unlikely but today’s session starts with the EUR/USD down eight sessions from that top, putting the Forex pair inside the window of time for a potentially bullish closing price reversal bottom.

The main range is 1.1800 to 1.2349. The EUR/USD is currently straddling its retracement zone at 1.2074 to 1.2010.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the Fibonacci level at 1.2010.

Bearish Scenario

A sustained move under 1.2010 will indicate the presence of sellers. If this move generates enough downside momentum then look for the possible start of a steep break with the next major support the 1.1800 main bottom from November 23.

Bullish Scenario

A sustained move over 1.2010 will signal the presence of buyers. This could fuel a move into the 50% level at 1.2074. Since the main trend is down, sellers could come in on a test of this level. Overcoming this level will indicate the buying is getting stronger, but not necessarily mean the trend is getting ready to turn higher.

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