EUR/USD Mid-Session Technical Analysis for January 29, 2021

The Euro is trading higher against the U.S. Dollar on Friday as market participants saw a European Central Bank rate cut as less likely and Euro Zone GDP data was better than expected. The news also pushed Euro Zone government bond yields higher and narrowed the spread between core and riskier debt.

At 14:41 GMT, the EUR/USD is trading 1.2146, up 0.0024 or +0.20%.

ECB governing council member Klaas Knot said on Wednesday that the ECB was ready to cut its deposit rate further below zero if necessary to keep its inflation target in sight. But five sources told Reuters on Friday that the ECB is unlikely to cut its already record-low policy rate.

On Thursday, ECB policymaker Martins Kazaks also said that a rate cut is not needed.

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, while a move through the next swing bottom at 1.2025 will reaffirm the downtrend.

A trade through 1.2190 will reaffirm the uptrend. This is followed by a second main top at 1.2349.

The main range is 1.1800 to 1.2349. Its retracement zone at 1.2074 to 1.2010 is support. This area stopped the selling recently at 1.2059 and 1.2054.

The minor range is 1.2190 to 1.2059. The EUR/USD is currently straddling its 50% level at 1.2125.

The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is the next upside target zone.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Friday will be determined by trader reaction to 1.2125.

Bullish Scenario

A sustained move over 1.2125 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into a retracement zone at 1.2190 to 1.2202.

Bearish Scenario

A sustained move under 1.2125 will signal the presence of sellers. This could trigger a retest of the retracement zone at 1.2074 to 1.2010. Inside this zone are a pair of bottoms at 1.2059 and 1.2054.

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