EUR/USD Mid-Session Techical Analysis for February 22, 2021

The Euro is trading better against the U.S. Dollar, but off its high on Monday as the greenback pared losses as vaccine progress, expectations for faster economic growth and inflation sent bond yields higher.

Yields on 10-year U.S. and German government bonds hit one-year and eight-month highs respectively as traders continued to play reflation trades.

At 15:05 GMT, the EUR/USD is trading 1.2145, up 0.0021 or +0.17%.

Commerzbank analyst Ulrich Leuchtmann argued that much at stake for the relationship between the Euro and the dollar lies in the growth differential between the two economies, Reuters said.

“Where EUR/USD is going to go medium-term depends on whether the U.S. economy really will be able to achieve a stronger post-lockdown boom than Europe”, he said, adding he expects the common currency to suffer in that regard in the first half of 2021.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.2190 will change the main trend to up. A move through 1.1952 will signal a resumption of the downtrend.

The minor trend is also down. A trade through 1.2170 will change the minor trend to up. This will shift momentum to the upside. A trade through 1.2023 will indicate the selling pressure is getting stronger again.

The main support zone is 1.2074 to 1.2010. The short-term resistance zone is 1.2151 to 1.2197.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close will be determined by trader reaction to the short-term 50% level at 1.2151.

Bullish Scenario

A sustained move over 1.2151 will indicate the presence of buyers. The first upside target is a minor top at 1.2170. This is followed by another minor top at 1.2190 and a short-term Fibonacci level at 1.2197. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.2151 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to continue into 1.2074.

A failure to hold 1.2074 could trigger a short-term spike into 1.2023, followed by the Fibonacci level at 1.2010. This is likely the trigger point for an acceleration to the downside.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.