EUR/USD Mid-Session Technical Analysis for October 26, 2020
The Euro is trading lower against the U.S. Dollar on Monday, as surging coronavirus cases in Europe and the United States and the lack of progress on a U.S. stimulus package made traders cautious about holding on to riskier assets.
At 10:58 GMT, the EUR/USD is trading 1.1822, down 0.0040 or -0.33%.
In the U.S., the number of new COVID-19 cases surged to record highs. In Europe, Italy and Spain imposed fresh restrictions to control a resurgence in coronavirus cases.
Meanwhile, U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan – but there have been few tangible signs that a long-stalled deal is actually nearer.
German Business Morale Falls on Virus Angst as Rebound Fades
German business morale fell for the first time in six months in October, weighed down by companies’ concerns about rising coronavirus infection rates that are making them more cautious about the coming months, a survey showed on Monday.
The Ifo Institute said its business climate index fell to 92.7 from a downwardly revised 93.2 in September. A Reuters poll had foreseen a decline to 93.0.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1881 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at 1.1688.
The short-term range is 1.2011 to 1.1612. Its retracement zone at 1.1811 to 1.1859 is currently being tested. This zone is controlling the near-term direction of the EUR/USD.
The minor range is 1.1688 to 1.1881. Its retracement zone at 1.1785 to 1.1762 is the primary downside target. Since the main trend is up, buyers could come in on a test of this area. They will be trying to produce a secondary higher bottom.
The longer-term retracement zone support is 1.1691 to 1.1616.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the EUR/USD the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at 1.1811 and the 61.8% level at 1.1859.
Bearish Scenario
Buyers are trying to create intraday support at 1.1811 on Monday. If this level fails then look for the selling to possibly extend into the support cluster at 1.1787 to 1.1785, followed by the minor Fibonacci level at 1.1762.
Bullish Scenario
Holding above 1.1811 will be the first sign of buyers, but a sustained move over 1.1859 will indicate the buying is getting stronger. This could extend the rally into the main top at 1.1881. This price is a potential trigger point for an acceleration to the upside.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
