EUR/USD Mid-Session Technical Update for December 21, 2020

The Euro is trading lower on Monday, but trying to claw back earlier losses after a stock market plunge drove investors out of the higher-yielding single-currency and into the safety of the U.S. Dollar.

Some traders are blaming the volatility on end-of-the-year profit-taking and position-squaring. Others are saying that the move is being fueled by concerns over a fast-spreading new coronavirus strain that shut down much of the United Kingdom and disrupted international freight.

At 15:37 GMT, the EUR/USD is trading 1.2209, down 0.0045 or -0.37%.

Adding to the pressure were growing fears the U.K. could crash out of its transition period out of the European Union on January 1.

In other news, Euro Zone consumer confidence rose by 3.7 points in December from the November number, figures released on Monday showed.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2273 will signal a resumption of the trend. The main trend will change to down on a move through 1.2059.

The minor trend is also up. A new minor top was formed at 1.2273.

The first minor range is 1.2273 to 1.2130. The EUR/USD is currently straddling its 50% level at 1.2202.

The second minor range is 1.2059 to 1.2273. Its 50% level at 1.2166 was straddled earlier. It is now potential support.

The short-term range is 1.1800 to 1.2273. If the trend changes to down then its 50% level at 1.2037 will become the first target.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close is likely to be determined by trader reaction to the minor pivot at 1.2202.

Bullish Scenario

A sustained move over 1.2202 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 1.2273.

Bearish Scenario

A sustained move under 1.2202 will signal the presence of sellers. This could trigger a retest of 1.2166. If this level fails as support then look for the selling to extend into the intraday low at 1.2130.

Taking out 1.2130 could trigger an acceleration into 1.2059, followed by 1.2037.