EUR/USD Mid-Session Technical Analysis for July 6, 2021

The Euro is trading lower against the U.S. Dollar on Tuesday as disappointing sentiment data pressured the single currency, but stronger-than-expected retail sales data helped limit losses.

Investor sentiment in Germany, the Euro Zone’s biggest economy, remains at a high level but fell sharply in July, the ZEW economic research institute reported, while data showed orders for German-made goods posted their sharpest slump in May since the first lockdown in 2020.

At 12:16 GMT, the EUR/USD settled at 1.1840, down 0.0023 or -0.20%.

In other news, Euro Zone monthly retail sales rose more than expected in May after a drop in April, driven mostly by purchases of non-food products and car fuel, data released on Tuesday showed.

The European Union’s statistics office Eurostat said retail sales in the 19 countries sharing the Euro increased 4.6% month-on-month in May and were 9.0% higher than a year earlier. Economists polled by Reuters had expected a 4.4% monthly rise and forecast an 8.2% year-on-year earlier.

The common currency has been also struggling to keep up with the greenback in the past month with the European Central Bank seemingly far behind many of its peers in the tightening cycle.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1808 will signal a resumption of the downtrend. A move through 1.1975 will change the main trend to up.

The minor trend is also down. A trade through 1.1895 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 1.1975 to 1.1808. Its 50% level at 1.1891 stopped the rally at 1.1895 earlier today.

If the main trend changes to up then a pair of 50% levels at 1.2027 and 1.2037 should be the primary upside target area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday should be determined by trader reaction to 1.1852.

Bearish Scenario

A sustained move under 1.1852 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at 1.1808. This price is a potential trigger point for an acceleration to the downside with 1.1704 the next likely target.

Bullish Scenario

A sustained move over 1.1852 will signal the presence of buyers. This could trigger a surge into 1.1891 – 1.1895. Taking out the upper level could trigger an acceleration to the upside with 1.1975 the next likely upside target price.