EUR/USD Mid-Session Technical Analysis for May 26, 2021

The Euro is trading lower against the U.S. Dollar on Wednesday, but remained close to its highest level since January. The recent price action has been impressive, but gains could be capped today by general caution ahead of Thursday’s U.S. Preliminary GDP, weekly unemployment claims and durable goods reports, and Friday’s reports on Core PCE, Trade Balance, Personal Income, Personal Spending and Consumer Sentiment.

At 11:35 GMT, the EUR/USD is trading 1.2234, down 0.0015 or -0.12%.

Furthermore, although we expected to see some reaction to the economic data, gains could be limited over the short-run ahead of the June 10 European Central Bank meeting. If there is selling pressure, however, don’t expect too much of a retreat if the economic data is steady and Fed policymakers continue to reiterate the Fed’s message of holding policy accommodative until the economic recovery steadies.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2266 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.2052.

The minor range is 1.2052 to 1.2266. Its 50% level at 1.2159 is potential support.

The short-term range is 1.1986 to 1.2266. Its 50% level at 1.2126 is additional support.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.2249. At this time, we’re looking at an inside range which tends to indicate investor indecision and impending volatility.

Bullish Scenario

A sustained move over 1.2249 will indicate the presence of buyers. Taking out 1.2266 will signal a resumption of the uptrend. If this move creates enough upside momentum then look for an eventual move into the January 6 main top at 1.2349.

Bearish Scenario

A sustained move under 1.2249 will signal the presence of sellers. A trade through 1.2212 will be a sign of weakness, while making 1.2266 a new minor top. If this move is able to generate enough downside momentum then look for the selling to possibly extend into the first minor pivot at 1.2159. Since the main trend is up, buyers could come in on the first test of this level.