EUR/USD Mid-Session Technical Analysis for February 18, 2021

The Euro is bouncing back on Thursday after a sharp two-day break culminated with its biggest loss in two weeks the previous session. The weakness was driven by a surge in the U.S. Dollar amid expectations that the U.S. economy would recover from the coronavirus pandemic faster than that of most of its peers.

Today’s strength is being partly attributed to weaker-than-expected U.S. weekly jobless claims.

At 13:03 GMT, the EUR/USD is trading 1.2086, up 0.0044 or +0.37%.

On Wednesday, the EUR/USD was pressured by a U.S. report that showed retail sales rebounded in January, while industrial output and producer prices data also provided a boost in the U.S. Dollar.

Later in the session, minutes from the Federal Reserve’s policy meeting last month reinforced the central bank’s willingness to let the economy run hot while keeping monetary settings ultra-accommodative.

In breaking news, first-time filings for unemployment insurance jumped higher last week in a sign of continuing strife for the labor market.

New claims totaled 861,000, the highest level in a month and above the Dow Jones estimate of 773,000, the Labor Department reported Thursday.


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 also shift momentum to the upside.

The main range is 1.1800 to 1.2349. The EUR/USD is currently testing its retracement zone at 1.2074 to 1.2010. Counter-trend buyers may be trying to form a support base. This zone is controlling the near-term direction of the Forex pair.

The short-term range is 1.2349 to 1.1952. Its retracement zone at 1.2151 to 1.2197 is resistance. This zone stopped the selling at 1.2170 on Tuesday.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Thursday is likely to be determined by trader reaction to 1.2074.

Bullish Scenario

A sustained move over 1.2074 will indicate the presence of buyers. If this move can create enough upside momentum then look for the move to possibly extend into 1.2151.

Bearish Scenario

A sustained move under 1.2074 will signal the presence of sellers. This could create the downside momentum needed to challenge 1.2010. This may be the trigger point for an acceleration into 1.1952.

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.