The Euro wallowed near its four-week low against the U.S. Dollar on Friday after the European Central Bank (ECB) signaled further monetary easing by the end of the year the previous session.
The ECB kept interest rates steady on Thursday but committed to contain the growing fallout from a second wave of coronavirus infections, saying it would hone its response by its December meeting, as widely expected by the market.
At 12:33 GMT, the EUR/USD is trading 1.1676, up 0.0036 or +0.03%.
“We agreed, all of us, that it was necessary to take action and therefore to recalibrate our instruments at our next Governing Council meeting,” ECB President Christine Lagarde told a news conference.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The main trend turned down on Thursday when sellers took out the last swing bottom at 1.1688.
A move through 1.1881 will change the main trend to up, however, this is highly unlikely. Today’s session begins with the EUR/USD down seven sessions since its last main top, putting the single-currency inside the window of time for a potentially bullish closing price reversal bottom. The chart pattern won’t change the main trend to up, but it could fuel a 2 to 3 day counter-trend rally.
The intermediate range is 1.1371 to 1.2011. The EUR/USD is currently testing its retracement zone at 1.1691 to 1.1616. Trader reaction to this zone is likely to determine the near-term direction of the EUR/USD.
The new minor range is 1.1881 to 1.1650. Its 50% level at 1.1766 is the next potential upside target.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at 1.1676, the direction of the EUR/USD into the close on Friday is likely to be determined by trader reaction to the intermediate 50% level at 1.1691.
A sustained move under 1.1691 will indicate the presence of sellers. This could lead to a retest of yesterday’s low at 1.1650, followed by a support cluster at 1.1616 to 1.1612. The latter is a potential trigger point for an acceleration to the downside.
A sustained move over 1.1691 will signal the presence of buyers. If this creates enough upside momentum over the near-term then look for a potential rally into the new minor pivot at 1.1766.