EUR/USD Mid-Session Technical Analysis for October 12, 2021
The Euro is trading lower against the U.S. Dollar on Tuesday after the ZEW indicator of economic sentiment in Germany slipped for the fifth month, the latest string of indicators showing supply bottlenecks holding back recovery in Europe’s largest economy.
Meanwhile, the U.S. Dollar continued to strengthen against the single-currency as traders positioned themselves for the U.S. Federal Reserve to announce a tapering of its massive bond buying program in November.
At 13:54 GMT, the EUR/USD is trading 1.1540, down 0.0015 or -0.13%.
The ZEW economic sentiment index fell to 22.3 points, compared with an expected 24.0, while the current conditions sentiment fell to 21.6, a 10.3 point fall, coming in well below an expected 28.5.
“The economic outlook for the German economy has dimmed noticeably,” said ZEW President Achim Wambach, adding that the decline was “mainly due to the persisting supply bottlenecks for raw materials and intermediate products”.
The key factor continuing to drive the Euro lower against the greenback is the widening interest rate differential with U.S. Government interest rate yields outperforming their German counterpart.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1529 will signal a resumption of the downtrend. A move through 1.1755 will change the main trend to up.
The minor trend is also down. A move through 1.1640 will change the minor trend to up. This will shift momentum to the upside.
The first minor range is 1.1640 to 1.1529. Its 50% level or pivot at 1.1585. The second minor pivot resistance is 1.1642. This levels will move lower if 1.1529 fails as support.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to 1.1585.
Bearish Scenario
A sustained move under 1.1585 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for a break into 1.1529.
Taking out 1.1529 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside with the July 16, 2021 main bottom at 1.1371 the next near-term target.
Bullish Scenario
A sustained move over 1.1585 will signal the return of buyers. If this move is able to create enough upside momentum then look for the increased buying to possibly drive the EUR/USD into the resistance cluster at 1.1640 – 1.1642 over the near-term.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
