EUR/USD Mid-Session Technical Analysis for December 1, 2021

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The Euro is trading nearly flat on Wednesday as risk appetite recovered somewhat, but common currency volatility remained elevated as investors weighed seemingly hawkish comments from the Federal Reserve and risks relating to the Omicron variant.

At 13:45 GMT, the EUR/USD is trading 1.1336, down 0.0004 or -0.03%.

The single-currency is being capped after comments on Tuesday by U.S. Fed Chair Jerome Powell said the risk of inflation had increased and signaled the central bank may accelerate its bond-buying taper at its meeting later this month.

The Euro is being underpinned by uncertainty over the impact of the Omicron variant on the global economic recovery.

In economic news, Euro Zone Manufacturing PMI data had little effect on the early price action. U.S. ADP Non-Farm Employment Change data had the same effect after coming in at 534K, slightly above the consensus estimate.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has shifted to the upside.

A trade through 1.1608 will change the main trend to up. A move through 1.1186 will signal a resumption of the downtrend.

The minor trend is up. It changed up on Tuesday when buyers took out the last minor top at 1.1374. This move shifted momentum to the upside.

The EUR/USD is currently trading on the strong side of a long-term Fibonacci level at 1.1291, making it new support.

On the upside, potential resistance is layered at 1.1397 and 1.1439. The primary upside target may be the long-term 50% level at 1.1493.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday and over the short-run is likely to be determined by trader reaction to 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. However, it is going to take a new catalyst to drive it through the nearest resistance at 1.1383 and 1.1397.

Once the EUR/USD clears 1.1397, the short-covering rally could start to expand to 1.1439 then 1.1493.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. The first downside target is the minor pivot at 1.1284.

Buyers could come in on the first test of 1.1284. They will be trying to form a potentially bullish secondary higher bottom. If it fails then look for the selling to lead to a retest of 1.1186, followed by the June 19, 2020 main bottom at 1.1168.

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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