The Euro is trading sharply higher after posting a rapid turnaround following a flat overnight session. Traders are keying off of a weaker dollar, which is losing ground on renewed stimulus talks. Investors are also focusing on the looming U.S. election and worries over rising coronavirus cases.
Continued talks over the weekend between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have yet to see any concrete details, but Pelosi has set Tuesday as a deadline for progress and any deal would likely be around $2 trillion figure, so the greenback is under pressure from the debt and spending dynamic.
At 12:33 GMT, the EUR/USD is trading 1.1782, up 0.0066 or +0.56%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1831 will change the main trend to up. A move through 1.1612 will reaffirm the downtrend.
The minor trend is also down. A move through 1.1688 will signal a resumption of the minor downtrend.
The short-term range is 1.2011 to 1.1612. Its retracement zone at 1.1811 to 1.1859 is the primary upside target.
The main support is the retracement zone at 1.1691 to 1.1616. The upper level essentially stopped the selling last Thursday at 1.1688.
Daily Swing Chart Technical Forecast
The current upside momentum looks strong enough to lead to a test of the short-term 50% level at 1.1811. Overtaking this level could trigger a change in trend over 1.1831, followed by the Fibonacci level at 1.1859.
On the downside, the strongest support is 1.1691 to 1.1688.
The new minor range is 1.1831 to 1.1688. Its pivot at 1.1760 is controlling the price action. We’re looking for the current upside bias to continue as long as the EUR/USD remains over the pivot.
The early price action suggests we’re in a headline driven market on Monday. This could lead to heightened volatility.