EUR/USD Mid-Session Technical Analysis for October 22, 2020

The Euro is edging lower from a seven-week high on Thursday as hopes for a fiscal stimulus package in the United States before the November elections crumbled again and the global surge in COVID-19 cases fueled demand for safe-haven assets like the greenback.

After hopes of a deal were raised throughout the week, lifting the single-currency, pressure on the Euro emerged after U.S. President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise. This comment threatened risk appetite, encouraging traders to trim their long Euro positions.

At 17:00 GMT, the EUR/USD is trading 1.1822, down 0.0037 or -0.31%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1881 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.1688.

The minor trend is also up. A new minor top was formed at 1.1881.

The short-term range is 1.2011 to 1.1612. The EUR/USD is currently testing its retracement zone at 1.1811 to 1.1859. This zone is potential resistance. It could also be controlling the near-term direction of the EUR/USD.

The minor range is 1.1688 to 1.1881. Its retracement zone at 1.1785 to 1.1762 is the primary downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD into the close is likely to be determined by trader reaction to 1.1811.

Bullish Scenario

Holding 1.1811 will indicate the presence of buyers. The first upside target is a minor 50% level at 1.1847. This is followed by the short-term Fibonacci level at 1.1859 and the minor top at 1.1881.

Bearish Scenario

A sustained move under 1.1811 will signal the presence of sellers. This could create the downside momentum to challenge the retracement zone at 1.1785 to 1.1762. With the main trend up, look for buyers to reemerge on a test of this zone.

For a look at all of today’s economic events, check out our economic calendar.