EUR/USD Mid-Session Technical Analysis for October 13, 2021
The Euro is edging higher against the U.S. Dollar but remained close to a one-year low on Wednesday as traders awaited the release of the minutes from the last Fed policy meeting in late September. Earlier in the session, traders had the opportunity to react to the government’s consumer inflation report which came in higher-than-expected.
At 16:21 GMT, the EUR/USD is trading 1.1571, up 0.0041 or +0.35%.
Today’s early price action reflects a “sell the rumor, buy the fact” situation. The CPI news was bullish for the U.S. Dollar because it moved the Fed closer to tapering and raising rates. Furthermore, Treasury yields should’ve moved higher on the news. Instead, yields fell, the dollar dropped and the Euro rose. All of this suggests profit-taking and position-squaring ahead of today’s Fed minutes due to be released at 18:00 GMT.
We’re looking for today’s Fed minutes to confirm that tapering will begin in November. However, we would like to see how fast policymakers will act to begin reducing its massive stimulus.
The market has priced in a Fed tapering for weeks. The next major move by the EUR/USD will be determined by the size of the tapering and the date of the first rate hike.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1524 will signal a resumption of the downtrend. The main trend will change to up on a move through 1.1755.
The minor trend is also down. A trade through 1.1640 will change the minor trend to up. This will shift momentum to the upside.
The minor range is 1.1640 to 1.1524. Its 50% level or pivot is 1.1582.
The second minor range is 1.1755 to 1.1524. Its 50% level at 1.1640 forms a potential resistance cluster with the minor top.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD into the close on Wednesday will be determined by trader reaction to 1.1582.
A sustained move over 1.1582 will indicate the presence of buyers. If this move creates enough intraday momentum then look for a surge into 1.1640.
A sustained move under 1.1582 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into 1.1524. This is a potential trigger point for an acceleration into the July 16, 2020 main bottom at 1.1371.