The Euro is trading sharply higher against the U.S. Dollar on Wednesday as traders react to better-than-expected Euro Zone economic reports while the U.S. Congress continues to battle over the next fiscal stimulus package.
The price action continues to indicate that investors believe the Euro Zone economy will recover from the effects of COVID-19 faster than the U.S. economy. In the U.S., the ADP Non-Farm Employment Change was well below expectations, indicating worsening conditions in the labor market.
At 14:02 GMT, the EUR/USD is trading 1.1889, up 0.0088 or +0.74%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1909 will signal a resumption of the uptrend. The main trend changes to down on a move through the nearest main bottom at 1.1185.
The minor trend is also up. A trade through 1.1696 will change the minor trend to down. This will also shift momentum to the downside.
The minor range is 1.1909 to 1.1696. Its 50% level or pivot at 1.1803 is support. It’s also controlling the near-term direction of the Forex pair.
The short-term range is 1.1371 to 1.1909. If the minor trend changes to down then is retracement zone at 1.1640 to 1.1577 will become the primary downside target.
Daily Swing Chart Technical Forecasts
Based on the early price action and the current price at 1.1889, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at 1.1803.
A sustained move over 1.1803 will indicate the presence of buyers. This could trigger an intraday surge into 1.1909. Taking out this level could trigger an acceleration into the May 14, 2018 main top at 1.1998.
The inability to sustain a rally over 1.1909 will be the first sign of sellers. This could trigger a retest of 1.1803. If this fails then look for it to create the downside momentum needed to challenge the minor bottom at 1.1696, followed by the short-tern 50% level at 1.1640.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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