EUR/USD Mid-Session Technical Analysis for June 17, 2021

The Euro is trading sharply lower for a second session on Thursday as a Federal Reserve policy meeting was more hawkish than expected, bringing forward the first projected U.S. rates increase.

Thirteen out of 18 policymakers foresaw a “liftoff” in borrowing costs in 2023 instead of 2024, with 11 of them seeing two increases of 25 basis points. Seven officials see rates moving higher next year, opening the possibility of even more aggressive action.

At 12:04 GMT, the EUR/USD is trading 1.19361, down 0.0061 or -0.51%.

In other news, a sharp spike in energy prices and more expensive services boosted Euro Zone consumer inflation in May as expected, data confirmed on Thursday, taking the rate price growth just above the European Central Bank’s target.

The sell-off in the EUR/USD is a sign that investors feel the U.S. economy is improving at a faster pace than the Euro Zone economy, making the greenback a more attractive asset.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out a pair of main bottoms at 1.1986 and 1.1943.

A trade through 1.2218 will change the main trend to up. This is highly unlikely, but the EUR/USD is down six sessions from its last main top, which means we could see one more day of weakness before it enters the window of time for a closing price reversal bottom.

The long-term range is 1.2349 to 1.1704. The EUR/USD is currently trading on the weak side of its 50% level at 1.2027.

The short-term range is 1.1704 to 1.2266. The EUR/USD is currently trading inside its retracement zone at 1.1985 to 1.1919. This zone is controlling the near-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1985.

Bearish Scenario

A sustained move under 1.1985 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the Fibonacci level at 1.1919. Look for a technical bounce on the first test of this level.

Look for an acceleration to the downside if 1.1919 fails as support. This could trigger the start of an acceleration to the downside with the March 31 main bottom at 1.1704 the eventual downside target.

Bullish Scenario

A sustained move over 1.1985 will signal the presence of buyers. The first upside target is the major 50% level at 1.2027. Sellers could come in on the first test of this level. Taking it out could trigger a strong short-covering rally.