EUR/USD Mid-Session Technical Analysis for September 6, 2021

The Euro is trading lower on Monday as the single-currency failed to extend its gains after rising above the 1.1900 level last week for the first time since the end of July. Impacting the trade is low volume due to a U.S. bank holiday and position-squaring ahead of Thursday’s European Central Bank (ECB) meeting.

At 11:15 GMT, the EUR/USD is trading 1.1866, down 0.0012 or -0.10%.

ECB chief economist Philip Lane has said it is too early for the ECB to lay out plans to wind down the 1.85 trillion Euro ($2.2 trillion) Pandemic Emergency Purchase Programme (PEPP). But the ECB is on Thursday expected to set the pace of PEPP buying for the fourth quarter, a decision that could take on greater significance given the taper talk.

“If the only decision we expect the ECB to take is on the pace of the next quarter’s worth of PEPP purchases, a spike in inflation and recent hawkish comments have raised the stakes,” said ING senior rates strategist Antoine Bouvet.

He added that this now put the focus on the ECB’s latest economic forecasts, due out on Thursday.

In economic news, German industrial orders unexpectedly surged in July, official figures showed on Monday, hitting a post-reunification high and pointing to a solid start to the second half in the engine room of Europe’s largest economy.

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. A move through 1.1664 will change the main trend to down.

The main range is 1.1975 to 1.1664. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1856 to 1.1820, making it support.

The short-term range is 1.1664 to 1.1909. Its retracement zone at 1.1787 to 1.1758 is the next potential support area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to the Fibonacci level at 1.1856.

Bullish Scenario

A sustained move over 1.1856 will indicate the presence of buyers. The first upside target is a minor pivot at 1.1883, followed by the minor top at 1.1909.

Taking out 1.1909 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with 1.1941 the next likely upside target.

Bearish Scenario

A sustained move under 1.1856 will signal the presence of sellers. If this move creates enough downside momentum then look for a steep break into the 50% level at 1.1820. Since the main trend is up, look for buyers on the first test of this level.

If 1.1820 fails as support then look for the selling to possibly extend into the minor retracement zone at 1.1787 to 1.1758 over the near-term.