EUR/USD: Weakens Under 1.0972, Strengthens Over 1.1019

The Euro is edging lower at the mid-session on Wednesday, suggesting investor indecision and impending volatility. The single-currency weakened as oil prices rose sharply.

A stronger U.S. Dollar also weighed on the common currency, helped by the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish European Central Bank (ECB).

At 15:55 GMT, the EUR/USD is trading 1.1000, down 0.0031 or -0.28%. The Invesco CurrencyShares Euro Trust ETF (FXE) is at $102.04, down $0.33 or -0.32%.

Crude prices were up more than 4% on Wednesday, supported by a disruption to Russian and Kazakh crude exports. Additionally, the Euro continued to be capped after Fed Chair Powell on Monday raised the possibility of hiking interest rates by more than 25 basis points at upcoming meetings.

One potential catalyst for volatility that Forex traders are eyeing is U.S. President Joe Biden’s visit to Europe. He is poised to announce, alongside other European leaders, new sanctions against Russia during his trip.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.0901 will change the main trend to down. A move through 1.1137 will signal a resumption of the uptrend.

The EUR/USD is currently trading inside a pair of 50% levels at 1.0972 and 1.1019.

On the upside, a pair of 50% levels at 1.1098 and 1.1151 is the best resistance with the latter a potential trigger point for an acceleration with 1.1389 the next major target.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Wednesday is likely to be determined by trader reaction to 1.1019 and 1.0972.

Bullish Scenario

A sustained move over 1.1019 will indicate the presence of buyers. This could trigger an acceleration into a resistance cluster. The cluster is formed by a 50% level at 1.1098, a main top at 1.1137 and another 50% level at 1.1151.

The 50% level at 1.1151 is a potential trigger point for an acceleration to the upside with 1.1389 the primary upside target.

Bearish Scenario

A sustained move under 1.0972 will signal the presence of sellers. Taking out this price with strong selling volume could trigger a sharp break into the next main bottom at 1.0901.

A move through 1.0901 will change the main trend to down.