EUR/USD Mid-Session Technical Analysis for October 25, 2021

The Euro is trading lower against the U.S. Dollar on Monday after reversing an earlier gain. The greenback rebounded as traders looked ahead to tighter U.S. monetary policy even as they bet on the prospect of interest rate hikes happening earlier outside the United States.

At 12:12 GMT, the EUR/USD is trading 1.1604, down 0.0041 or -0.35%.

The EUR/USD initially rose during trading in Asia, extending its strength after Federal Reserve Chair Jerome Powell said on Friday it was not yet time to begin raising interest rates.

While Powell said it was not right to start hiking rates, he also warned about inflationary pressures and said it was time to cut back on its asset purchases.

Traders also said the quick reversal by the Euro may have been fueled by position-squaring ahead of Thursday’s European Central Bank (ECB) meeting.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher.

A trade through 1.1755 will change the main trend to up. A move through 1.1524 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 1.1669 will indicate the upside momentum is getting stronger, while a move through 1.1572 will change the minor trend to down.

On the upside, resistance is a pair of 50% levels at 1.1621 and 1.1640. Taking out 1.1669 will make 1.1717 to 1.1762 the next upside target zone.

On the downside, the nearest support is a minor pivot at 1.1597.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to 1.1597.

Bearish Scenario

A sustained move under 1.1597 will indicate the selling pressure is getting stronger. This could trigger a sharp break into the minor bottom at 1.1572.

Taking out 1.1572 will change the minor trend to down and could trigger an acceleration to the downside with 1.1524 the next likely target.

Bullish Scenario

A sustained move over 1.1597 will indicate that buyers are coming in to defend against a steep sell-off.

Overtaking 1.1621 and 1.1640 will indicate the intraday buying is getting stronger. This could trigger a surge into the minor top at 1.1669.

Taking out 1.1669 could trigger an acceleration into 1.1717 to 1.1762 over the short-run.