EUR/USD Mid-Session Technical Analysis for October 8, 2020

The Euro is trading nearly flat against the U.S. Dollar on Thursday as traders price in the possibility of additional stimulus in the United States. Although President Donald Trump killed the idea of a comprehensive fiscal stimulus package on Tuesday, later that evening he did suggest the possibility of a series of small piecemeal deals including another $1200 stimulus check, financial aid for businesses and more money for the airlines.

At 12:40 GMT, the EUR/USD is trading 1.1759, down 0.0005 or -0.04%.

ECB Makes Case for “Free Hand” to Fight Pandemic Damage

European Central Bank (ECB) rate-setters argued for a “free hand” to fight the economic damage caused by the coronavirus pandemic and emphasized their readiness to add to stimulus, the accounts of their September meeting showed on Thursday.

Although the bank kept policy steady at the meeting, the accounts indicate oversized concerns about the outlook with a long list of risk from a strong Euro and higher infection rates to the U.S. election all weighing on growth.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. The main trend changes to up on a trade through 1.1872. A move through 1.1612 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 1.1808 will indicate the buying is getting stronger. A trade through 1.1696 will change the minor trend to down.

A move through 1.1782 will make 1.1725 a new minor bottom.

The price action is also being affected by a series of retracement levels. This is helping to generate the sideways trade.

On the downside, retracement level support comes in at 1.1742, 1.1710 and 1.1691. On the upside, retracement level resistance is 1.1773 and 1.1811.

Daily Swing Chart Technical Forecast

The early price action suggests the direction on Thursday will be determined by trader reaction to 1.1773.

Bearish Scenario

A sustained move under 1.1773 will indicate the presence of sellers. This could trigger a quick break into 1.1742. Taking out this level could trigger an even steeper break into 1.1710.

Bullish Scenario

A sustained move over 1.1773 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to possible extend into the resistance cluster at 1.1808 to 1.1811. The latter is a potential trigger point for an acceleration to the upside with 1.1859 the next major target.