EUR/USD Mid-Session Technical Analysis for September 10, 2021

The Euro is trading higher against the U.S. Dollar on Friday, following through to the upside after the European Central Bank said Thursday it would trim emergency bond purchases over the coming quarter, as widely expected.

At 12:34 GMT, the EUR/USD is trading 1.1835, up 0.0012 or +0.10%.

The ECB said it will in the next three months buy bonds under its 1.85 trillion Euro Pandemic Emergency Purchase Programme (PEPP) at a pace moderately lower than the 80 billion Euros a month it bought over the previous two quarters.

The move has been described as a token step towards unwinding the emergency economic aid it has put in place during the pandemic.

Analysts polled by Reuters had said they saw bond buying under the ECB’s pandemic emergency purchase programme (PEPP) falling to possibly as low as 60 billion Euros ($71 billion) a month, before a further fall early next year and the scheme’s end in March.

But the ECB did not signal any further withdrawal of support, and maintained its long-standing guidance that it will ramp up support further if it becomes necessary.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1909 will signal a resumption of the uptrend. The main trend will change to down on a trade through 1.1664.

The minor trend is also up. A trade through 1.1802 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 1.1603 to 1.1975. The EUR/USD is currently trading inside its retracement zone at 1.1820 to 1.1856.

The minor range is 1.1909 to 1.1802. Its retracement zone at 1.1856 to 1.1868 is the next upside target.

Both retracement zones pinpoint 1.1856 as the key level to watch.

The short-term range is 1.1664 to 1.1909. If the minor trend changes to down then look for a move into its retracement zone at 1.1787 to 1.1758.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1820.

Bullish Scenario

A sustained move over 1.1820 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into 1.1856. Watch for aggressive counter-trend sellers on the first test of this level.

Overtaking 1.1856 could trigger a quick move into 1.1868. This is a potential trigger point for an acceleration to the upside with 1.1909 the next upside target.

Bearish Scenario

A sustained move under 1.1820 will signal the presence of sellers. The first downside target is the minor bottom at 1.1802. Taking out this level will shift momentum to the downside, which could lead to an extension of the break into 1.1787 to 1.1758.