EUR/USD Mid-Session Technical Analysis for January 6, 2021The direction of the EUR/USD the rest of the session will be determined by trader reaction to 1.2297.
The Euro is surging on Wednesday as Democrats took the lead in runoff votes that will determine control of the U.S. Senate and possibly pave the way for a big spending administration under President-elect Joe Biden. The single currency is currently pressing a new 32-month high.
The catalyst behind the gains is the assumption a Democrat-controlled Senate would be positive for economic growth globally and thus for most riskier assets, but negative for bonds and the dollar as the U.S. budget and trade deficits swell even further.
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At 13:21 GMT, the EUR/USD is trading 1.2340, up 0.0043 or +0.35%.
Later today at 1900 GMT, the minutes of the Fed’s December monetary policy meeting will be released and are likely to detail just what drove policymakers to leave their monthly bond purchases unchanged and how the Fed is factoring the promise of a coronavirus vaccine into its plans. Of greatest interest is any insight those minutes offer into what it would take for central bankers to shift monetary policy in coming months if widespread immunization triggers a stronger economic rebound.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the swing top at 1.2310. A trade through 1.2025 will change the main trend to down.
The minor range is 1.2025 to 1.2349. Its 50% level at 1.2187 is the nearest support. This level will move up as price rise.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD the rest of the session will be determined by trader reaction to 1.2297.
A sustained move over 1.2297 will indicate the presence of buyers. Taking out the intraday high at 1.2349 will indicate the buying is getting stronger. If this is able to generate enough upside momentum then look for the rally to possibly extend into the April 17, 2018 main top at 1.2413.
A sustained move under 1.2297 will signal the presence of sellers. If this creates enough downside momentum then 1.2187 will become the primary downside target.
A close under 1.2297 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 correction.