EUR/USD Mid-Session Technical Analysis for November 10, 2020The early price action suggests the direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the 50% level at 1.1807.
The Euro is edging lower against the U.S. Dollar on Tuesday as investors remained optimistic about progress towards a COVID-19 vaccine, although the moves were more tempered than in the previous session. The dollar rally could resume later in the day if the vaccine news continues to fuel a wave of risk appetite.
At 14:28 GMT, the EUR/USD is trading 1.1811, down 0.0001 or -0.01%.
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Offsetting news is expected to lead to heightened volatility over the near-term. The Euro could continue to feel downside pressure due to the European Central Bank (ECB) having signaled its awareness of the downside of rapid Euro strength. Furthermore, the ECB is considering more stimulus sometime after its December meeting.
On the bullish side, the Euro could find buyers if the dollar weakens in light of uncertainty about how or when a vaccine could be rolled out.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of a closing price reversal top on Monday and its subsequent confirmation earlier today.
A trade through 1.1920 will negate the chart pattern and signal a resumption of the uptrend. The main trend changes to down on a move through 1.1603. This is highly unlikely today, but there is room for a normal 50% to 61.8% correction of the current rally.
The short-term range is 1.2011 to 1.1603. The EUR/USD is currently testing its retracement zone at 1.1807 to 1.1855. It looks as if traders are trying to turn this zone into resistance.
The minor range is 1.1603 to 1.1920. Its retracement zone at 1.1762 to 1.1724 is the primary downside target. Since the main trend is up, buyers could come in on a test of this area.
Daily Swing Chart Technical Forecast
The early price action suggests the direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the 50% level at 1.1807.
A sustained move over 1.1807 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the Fibonacci level at 1.1855. Taking out this level could trigger a retest of the minor top at 1.1920.
A sustained move under 1.1807 will signal the presence of sellers. This could trigger an acceleration into the minor retracement zone at 1.1762 to 1.1724. Watch for buyers to emerge on a test of this area.