EUR/USD Mid-Session Technical Analysis for January 21, 2021The next big decision for traders will be following a test of the short-term target zone at 1.2202 to 1.2236.
The Euro is trading higher against the U.S. Dollar at the mid-session on Thursday even as European Central Bank President Christine Lagarde warned about a renewed surge in COVID-19 infections and the prospect of prolonged restrictions that could challenge the region’s economic outlook. The ECB, which kept interest rates steady on Thursday, also pledged to provide more support for the economy if needed.
At 17:00 GMT, the EUR/USD is trading 1.2142, up 0.0036 or +0.30%.
75% of retail CFD investors lose money
Euro traders showed little reaction to Lagarde’s comments, as market participants continued to focus on what seemed like an improving global economic outlook and a nearly $2 trillion U.S. stimulus package proposed by new Democratic President Joe Biden’s administration.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.2054 will change the main trend to down. A move through 1.2349 will signal a resumption of the uptrend.
The main range is 1.1800 to 1.2349. Its 50% level at 1.2074 is controlling the near-term direction of the EUR/USD. It’s also a possible trigger point for an acceleration to the downside.
The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is the primary upside target.
The next big decision for traders will be following a test of the short-term target zone at 1.2202 to 1.2236. We know the main trend is still up despite the sell-off since the first week in January, but we’re not going to see an eventual continuation of that trend unless buyers can overcome the Fibonacci level or top of the zone at 1.2236.
Meanwhile, we also know that there are sellers in the market. Otherwise, we wouldn’t have seen the steep break from 1.2349. Sellers let up or new buyers came in at 1.2054 earlier in the week.
Sellers could re-emerge on a test of 1.2202 to 1.2236. They are going to try to form a secondary lower top. If successful, this could create the downside pressure needed to take out the 50% level at 1.2074, followed by the two main bottoms at 1.2054 and 1.2025. Taking out the latter could trigger an acceleration to the downside.
For a look at all of today’s economic events, check out our economic calendar.