EUR/USD Mid-Session Technical Analysis for March 3, 2021The early price action suggests the direction of the EUR/USD into the close on Wednesday will be determined by trader reaction to 1.2074 and 1.2118.
The Euro is trading lower on Wednesday after a report showed the Euro Zone economy may be in the midst of a double-dip recession as COVID-19 lockdowns continue to hammer the services industry, but some of the weakness in the single-currency was offset by a rise in optimism to a three-year peak on hopes for a wider vaccine rollout.
At 14:01 GMT, the EUR/USD is trading 1.2054, down 0.0036 or -0.30%.
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IHS Markit’s Final February Composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, rose to 48.8 from January’s 47.8, above a flash reading of 48.1, but firmly below the 50 market separating growth from contraction.
A PMI for the Euro Zone’s dominant services industry, most affected by lockdowns, rose to 45.7 last month, ahead of January’s 45.4 and the 44.7 flash estimate but still well below breakeven.
The EU’s inoculation campaign has been marred by cuts in promised deliveries, rollout delays and some social resistance but there are expectations these will be ironed out and the composite future output index, which measures optimism, bounced to 67.0 from 64.2.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1952 will signal a resumption of the downtrend. The main trend will change to up on a move through 1.2243.
The minor trend is also down. A trade through 1.1992 will reaffirm this downtrend.
The EUR/USD is currently testing the main retracement zone at 1.2074 to 1.2010. This zone is controlling the longer-term direction of the Forex pair.
The minor range is 1.2243 to 1.1992. Its 50% level at 1.2118 stopped the rally at 1.2113 earlier today.
The short-term range is 1.2349 to 1.1952. Its retracement zone at 1.2151 to 1.2197 is resistance.
Daily Swing Chart Technical Forecast
The early price action suggests the direction of the EUR/USD into the close on Wednesday will be determined by trader reaction to 1.2074 and 1.2118.
A sustained move under 1.2074 will indicate the presence of sellers. If this creates enough downside momentum then look for a move into 1.2010, followed closely by the minor bottom at 1.1992.
A sustained move over 1.2074 will signal the return of buyers. If this rebound creates enough upside momentum then look for the move to possibly extend into 1.2113 to 1.2118. The latter is a potential trigger point for a surge into 1.2151.
For a look at all of today’s economic events, check out our economic calendar.