EUR/USD Mid-Session Technical Analysis for July 19, 2021

The Euro is trading lower against the U.S. Dollar on Monday as investors sought protection in the greenback in response to a rise in coronavirus cases around the world and its potential impact on the pace of the global economic recovery.

Meanwhile, Euro Zone government bond yields fell ahead of Thursday’s policy meeting of the European Central Bank (ECB), while concerns about the Delta variant of the coronavirus curbed risk appetite.

Most analysts, however, did not expect many changes at Thursday’s policy meeting.

At 12:47 GMT, the EUR/USD is trading 1.1777, down 0.0029 or -0.24%.

ECB policymakers are set for a showdown as they chart a new policy path amid disagreements on how much more stimulus, mainly in bond purchases, is needed.

Germany’s 10-year bond yield was down 2 basis points, after hitting its lowest level since March 26 at -0.376%. The German 10-year real yield fell 0.5 bps, after setting its lowest low since August 2019 at -1.686%.

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 last week’s low at 1.1772. A trade through 1.1881 will change the main trend to up.

The minor trend is also down. A trade through 1.1851 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 1.1881 to 1.1764. Its 50% level at 1.1823 is resistance. This level will move down as prices move lower.

The short-term range is 1.1975 to 1.1764. Its retracement zone at 1.1869 to 1.1894 is the nearest resistance zone.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1806.

Bearish Scenario

A sustained move under 1.1806 will indicate the presence of sellers. The first downside target is the intraday low at 1.1764. Taking out this level with conviction could generate the momentum needed to drive the EUR/USD into the March 31 main bottom at 1.1704.

Bullish Scenario

A sustained move over 1.1806 will signal the presence of buyers. The first upside target is the minor pivot at 1.1823. Overtaking this level will indicate the short-covering is getting stronger with the next upside targets a cluster of levels at 1.1851, 1.1869, 1.1881 and a resistance cluster at 1.1894 – 1.1895.