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

The Euro is trading higher against the U.S. Dollar as the yield on the benchmark 10-year Treasury note dropped by more than 11 basis points to 1.5277%, making the greenback a less-attractive asset. The yield on the 30-year Treasury bond fell to 1.8798%.

The drop in yields and the dollar is being fueled by the news of a heavily-mutated COVID-19 variant first detected in South Africa.

Some traders are saying the news of this new variant would give the Federal Reserve reason to pause on its normalization of monetary policy. For this reason alone, U.S. Dollar investors are booking profits after it reached a nearly 17 month high against a basket of major currencies on Wednesday.

At 11:48 GMT, the EUR/USD is trading 1.1289, up 0.0080 or +0.72%.

We could see a huge short squeeze if the news event gains traction over the weekend.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1186 will signal a resumption of the downtrend. A move through 1.1608 will change the main trend to up. This is highly unlikely, but there is room for a sizable retracement of the recent break.

The minor trend is also down. A trade through 1.1374 will change the minor trend to up. This will shift momentum to the upside.

The first upside target is a long-term Fibonacci level at 1.1291. This is followed by a series of minor 50% levels at 1.1325, 1.1397 and 1.1439. The long-term 50% level comes in at 1.1493.

On the downside, the major support is the main bottom from June 19, 2020 at 1.1168.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Friday is likely to be determined by trader reaction to 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. This could trigger a quick pop into 1.1325. Overtaking this level could trigger an even stronger rally into the minor top at 1.1374.

Momentum will shift to the upside if 1.1374 is taken out. This could trigger the start of an even stronger short-covering rally.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. The first downside target is 1.1232. Counter-trend buyers could come in on a test of this level. If it fails then look for a retest of 1.1186.

The main bottom at 1.1168 is a potential trigger point for an acceleration to the downside with 1.0871 the next major target.