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

The Euro is trading lower against the U.S. Dollar on Wednesday, but still remains near a one-week high struck the previous session amid concerns the highly contagious Delta coronavirus variant could derail the global economic recovery.

That news may be capping gains, but underpinning the market is an improvement in risk appetite, fueled by the U.S. Food and Drug Administration’s full approval of the COVID-19 vaccine developed by Pfizer and BioNTech that could accelerate U.S. inoculations.

At 12:14 GMT, the EUR/USD is trading 1.1734, down 0.0023 or -0.20%.

Also helping to support the common currency are dampened expectations that Fed Chair Jerome Powell will indicate a timeline for tapering when he speaks at the Federal Reserve’s annual central bankers’ summit at Jackson Hole, Wyoming, on Friday.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has shifted to the upside. A trade through 1.1805 will change the main trend to up. A move through 1.1664 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A new minor top has formed at 1.1765. A trade through this level will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 1.1805 to 1.1664. After an early test, the EUR/USD is now trading on the weak side of its retracement zone at 1.1735 to 1.1751, making it new resistance.

If the minor trend changes to up then look for the buying to possibly extend into the next 50% level at 1.1787.

The minor range is 1.1664 to 1.1765. Its retracement zone at 1.1715 to 1.1703 is the next potential downside target. Aggressive counter-trend buyers could come in on a test of this area.

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 1.1735.

Bearish Scenario

A sustained move under 1.1735 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling pressure to possibly extend into 1.1715 to 1.1703. Watch for a technical bounce on the first test of this area.

Taking out 1.1703 with heavy volume could trigger a further break into 1.1664.

Bullish Scenario

A sustained move over 1.1735 will signal the presence of buyers. The first upside targets are 1.1751 and 1.1765. Taking out the latter could trigger a further rally into 1.1787, followed closely by the main top at 1.1805.

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.