EUR/USD Mid-Session Technical Analysis for August 16, 2021

The Euro is trading lower against the U.S. Dollar on Monday after the greenback recovered from early session weakness as disappointing economic activity data from China helped ease some of the pressure from Friday’s surprising weak U.S. consumer sentiment report.

At 13:12 GMT, the EUR/USD is trading 1.1783, down 0.0013 or -0.11%.

China’s July retail sales, industrial production and fixed asset investment were all weaker than expected as the latest COVID-19 outbreak weighed on the world’s second-biggest economy.

In other news, the European Central Bank is likely to announce long-awaited plans to reduce its pandemic-related asset purchases in the next quarter, according to a Reuters poll of economists, most of whom expected the programme to be wrapped up by the end of March 2022.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1909 will change the main trend to up. A move through 1.1706 will signal a resumption of the downtrend.

Although the minor trend is also down, momentum shifted to the upside when buyers confirmed the August 11 closing price reversal on Friday.

The new minor range is 1.1706 to 1.1805. Its 50% level or pivot at 1.1756 is potential support. Counter-trend buyers could come in on a test of this level in an effort to form a secondary higher bottom.

The short-term range is 1.1909 to 1.1706. Its retracement zone at 1.1808 to 1.1831 is the next upside target and potential resistance area.

The intermediate-term retracement zone is 1.1841 to 1.1872. It forms a potential resistance cluster with the short-term range at 1.1831 to 1.1841.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1808.

Bearish Scenario

A sustained move under 1.1808 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 1.1756.

Look for counter-trend buyers on the first test of 1.1756. They’ll be trying to form a potentially bullish secondary higher bottom. If this level rails as support then look for increased momentum and a possible extension of the selling into 1.1706 to 1.1704.

Bullish Scenario

A sustained move over 1.1808 will signal the presence of buyers. This could trigger a surge into 1.1831 to 1.1841. Since the main trend is down, sellers could come in on a test of this area. Overcoming 1.1841 will indicate the buying is getting stronger. This could trigger another surge into 1.1872.

For a look at all of today’s economic events, check out our economic calendar.

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.