EUR/USD Mid-Session Technical Analysis for July 23, 2021

The Euro is trading nearly flat against the U.S. Dollar on Friday as investors continued to digest the European Central Bank (ECB) statement and comments made by its president on Thursday. Today’s inside move suggests investors may be already looking ahead to next week’s U.S. Federal Reserve meeting. The chart pattern typically indicates investor indecision and impending volatility.

At 11:30 GMT, the EUR/USD is trading 1.1762, down 0.0008 or -0.07%.

The EUR/USD is being capped after the ECB pledged to keep interest rates at record lows for even longer, as widely expected.

Meanwhile, ECB President Christine Lagarde, in her media briefing, said a fresh wave of the coronavirus pandemic could pose a risk to the region’s recovery, although she did offer a more balanced economic outlook.

In economic news, Euro Zone bond yields sought directions on Friday and were little moved by a strong business activity reading for the bloc. Flash Purchasing Managers’ Index (PMI) data from IHS Markit, showed Euro Zone business activity expanded at its fastest monthly pace in over two decades in July, despite slowing in France, and exceeded expectations.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1752 will signal a resumption of the downtrend. A move through 1.1881 will change the main trend to up.

The minor trend changed to up on Thursday, but that move looks like it was triggered by buy stops and short-covering rather than new buying. Buyers will need to take out 1.1830 in order to reaffirm the uptrend.

The minor range is 1.1752 to 1.1830. Its 50% level or pivot at 1.1791 is acting like resistance.

A second minor range is 1.1881 to 1.1752. Its 50% level at 1.1817 is resistance.

The short-term range is 1.1975 to 1.1752. If the minor uptrend is confirmed then look for the buying to possibly extend into 1.1864 to 1.1890.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1791.

Bearish Scenario

A sustained move under 1.1791 will indicate the presence of sellers. If this move creates enough downside momentum then look for a break into 1.1752.

Taking out 1.1752 could trigger an acceleration into the March 31 main bottom at 1.1704.

Bullish Scenario

A sustained move over 1.1791 will signal the presence of buyers. This move could generate the upside momentum needed to challenge 1.1817, followed by 1.1830.