EUR/USD Mid-Session Technical Update for August 4, 2020

The Euro is little changed against the U.S. Dollar at the mid-session on Tuesday; the two-day short-squeeze rally appears to be losing steam. Meanwhile, investors are now looking at Washington for guidance as policymakers continue to hammer out the latest coronavirus relief aid package.

At 16:13 GMT, the EUR/USD is trading 1.1768, up 0.0003 or +0.02%.

In July, the Euro posted a 5% gain against the U.S. Dollar, while the greenback had its worst month against a basket of currencies in a decade.

The immediate outlook for the EUR/USD remains tied partly to relief aid talks in Washington and the economic impact of new virus cases in the United States.

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 move through 1.1185.

The minor trend is also up. It changes to down on a move through 1.1696. This will also confirm the shift in momentum to the downside.

The minor range is 1.1909 to 1.1696. Its 50% level at 1.1803 is acting like resistance today.

The second minor range is 1.1371 to 1.1909. Its retracement zone at 1.1640 to 1.1577 is potential support and the first downside target of Friday’s closing price reversal top formation.

The short-term range is 1.1185 to 1.1909. Its retracement zone at 1.1547 to 1.1462 is major support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1768, the direction of the EUR/USD into the close on Tuesday is likely to be determined by trader reaction to the short-term pivot at 1.1803.

Bullish Scenario

A sustained move over 1.1803 will indicate the presence of buyers. If this move gains enough traction, we could see a retest of the closing price reversal top at 1.1909.

Bearish Scenario

A sustained move under 1.1909 will signal the presence of sellers. This will be a continuation of the selling that started on July 31 with the formation of the closing price reversal top.

Taking out 1.1696 will change the minor trend to down. This could create the downside momentum needed to challenge the 50% level at 1.1640.

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