EUR/USD Weakens Under 1.0972, Strengthens Over 1.1019

The Euro is inching lower against the U.S. Dollar on Thursday, but remains inside Tuesday’s trading range for a second session. The price action suggests investor indecision and impending volatility. The single-currency is being capped by the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish European Central Bank (ECB).

Higher oil prices and uncertainty over the outcome of the war between Ukraine and Russia are also issues weighing on the common currency at this time.

At 10:54 GMT, the EUR/USD is trading 1.0985, down 0.0021 or -0.19%. On Wednesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $102.08, down $0.29 or -0.28%.

In economic news, business activity across Germany’s private sector dipped in March as output price inflation hit a new record high and the war in Ukraine impacted demand as well as supply chains, a survey showed.

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 reaffirm the uptrend.

The first minor retracement zone is 1.0806 to 1.1137. Its 50% level at 1.0972 has been acting like support.

The second minor retracement zone is 1.0901 to 1.1137. Its 50% level at 1.1019 has been acting like resistance.

On the upside, additional resistance is a pair of 50% levels at 1.1098 to 1.1151. The latter is a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

With the EUR/USD trapped inside a pair of retracement levels, its direction is likely to be determined by trader reaction to 1.0972 and 1.1019.

Bearish Scenario

A sustained move under 1.0972 will indicate the presence of sellers. The first downside target is the main bottom at 1.0901. Taking out this level will change the main trend to down with 1.0806 the next major target.

Bullish Scenario

A sustained move over 1.1019 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the pair of 50% levels at 1.1098 and 1.1151. Inside this zone is the main top at 1.1137.

Taking out the pivot at 1.1151 could trigger an acceleration to the upside since the nearest main top is 1.1389.