EUR/USD Trapped by 50% Levels at 1.1308 and 1.1407

The Euro is inching lower against the U.S. Dollar on Friday as the common currency continued its week of choppy trading driven by Russia-Ukraine headlines.

Helping to underpin the single-currency is hope for an easing of geopolitical tensions after news of talks between the United States and Russia over the crisis in Ukraine.

At 13:31 GMT, the EUR/USD is trading 1.1352, down 0.0010 or -0.08%. On Thursday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $105.49, down $0.23 or -0.22%.

Putting a lid on prices were comments from U.S. President Joe Biden, who warned Thursday that there was a “very high” threat that Russia would launch an invasion of Ukraine “within the next several days” as the Kremlin sent Washington a memo complaining bitterly its demands for security guarantees were being ignored, and again threatening a “military-technical” response.

Given the talks between the U.S and Russia, and Monday’s U.S. bank holiday, we could see a tight, low volume trade on Friday. Signs of actual military activity, of course, would generate volatility and likely selling pressure on the EUR/USD.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1280 will signal a resumption of the downtrend. A move through 1.1495 will change the main trend to up.

The minor trend is also down. A trade through 1.1395 will change the minor trend to up. This will shift momentum to the upside.

The first minor range is 1.1280 to 1.1395. The EUR/US is currently trading on the strong side of its pivot at 1.1338, making it support.

The second minor range is 1.1495 to 1.1280. Its pivot at 1.1387 is resistance.

The short-term range is 1.1122 to 1.1495. Its retracement zone at 1.1308 to 1.1265 is support. This zone stopped the selling at 1.1280 on February 14.

The main range is 1.1692 to 1.1122. Its retracement zone at 1.1407 to 1.1474 is the next retracement zone target. This is followed by a long-term resistance zone at 1.1516 to 1.1608.

The two combine to form another resistance zone at 1.1474 to 1.1516. This zone stopped the buying at 1.1495 on February 10.

Daily Swing Chart Technical Forecast

We’re currently in a headline driven market so we don’t expect to see much movement until there is news. Because of the headlines, we looking for volatility and a potential breakout, or breakdown. It all depends on whether the developments in Eastern Europe are bullish or bearish.

A bullish tone could develop on a sustained move over 1.1407. If this generates enough upside momentum then look for a surge into 1.1474, followed by the main top at 1.1495. Taking out this level will change the main trend to up.

The bearish tone will resume on a failure at 1.1338. However, don’t expect to see an acceleration to the downside unless sellers can take out the short-term Fibonacci level at 1.1265.