EUR/USD Strengthens Over 1.1248, Weakens Under 1.1191

The Euro is trading lower against the U.S. Dollar late in the session on Monday as the single-currency continued to bounce inside the range establish earlier in the day. Traders continue to monitor developments in the Russian invasion of Ukraine, including a new batch of sanctions from the U.S. and its allies.

At 18:24 GMT, the EUR/USD is trading 1.1205, down 0.0068 or -0.60%. The Invesco CurrencyShares Euro Trust ETF (FXE) is at $104.19, down $0.39 or -0.37%.

Traders are also eyeing the movement in U.S. Treasury yields which are a good indicator of risk sentiment. On the opening, yields plunged as well as the Euro as risk was clearly off. Yields rose shortly thereafter and the Euro settled into a sideways-to-lower range. Late in the day, however, yields appear to be dropping again after stocks gave up their gains. If this is related to safe-haven buying then expect the Euro to retreat again into the close.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1107 will signal a resumption of the downtrend. A move through 1.1389 will change the main trend to up.

The first minor range is 1.1389 to 1.1107. Its 50% level at 1.1248 is resistance. It played a role in stopping an early rally at 1.1246.

The second minor range is 1.1495 to 1.1107. Its 50% level at 1.1301 is another resistance level.

Short-Term Outlook

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to 1.1191.

Bullish Scenario

A sustained move over 1.1191 will indicate the presence of buyers. Taking out the first pivot at 1.1248 will indicate the buying is getting stronger. This could trigger a surge into the second pivot at 1.1301.

The second pivot at 1.1301 is a potential trigger point for an acceleration to the upside with the main top at 1.1389 the next target. Taking out this level will change the main trend to up.

Bearish Scenario

A sustained move under 1.1191 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to continue into last week’s low at 1.1107.

If 1.1107 fails as support then the May 25, 2020 main bottom at 1.0871 will become the primary downside target.