EUR/USD Mid-Session Technical Analysis for October 27, 2021

The Euro is trading higher against the U.S. Dollar as investors adjust positions ahead of Thursday’s European Central Bank (ECB) monetary policy decision. Traders expect central bank officials to take a dovish stance.

The ECB is expected to keep policy unchanged and leave a decision on its pandemic emergency bond purchase program to December, but its president Christine Lagarde is expected to push back on market pricing that has seen breakeven inflation expectations hit seven-year highs above the ECB’s 2% target and a rate hike priced in for next year.

At 12:47 GMT, the EUR/USD is trading 1.1622, up 0.0025 or +0.22%.

Ahead of the meeting, the German government cut its 2021 forecast for this year, as supply bottlenecks for semiconductors and rising energy costs delay recovery in Europe’s largest economy.

The German government on Wednesday cut its growth forecast for this year to 2.6% but raised its estimate for next year to 4.1% as supply bottlenecks for semiconductors and rising energy costs delay the recovery in Europe’s largest economy.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher.

A trade through 1.1669 will change the main trend to up. A move through 1.1524 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 1.1585 will change the minor trend to down. A move through 1.1572 will confirm the change in trend.

The EUR/USD is currently testing a pivot at 1.1621. Additionally, pivot support is 1.1597 and pivot resistance is 1.1640.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.1621.

Bullish Scenario

A sustained move over 1.1621 will indicate the presence of buyers with 1.1640 the first target. Overtaking this level could trigger a surge into 1.1669.

Bearish Scenario

A sustained move under 1.1621 will signal the presence of sellers with 1.1597 the next target, followed by 1.1585 and 1.1572.

Side Notes

We’re looking for a choppy, two-sided trade. Low volume means be careful buying strength and selling weakness.