EUR/USD Mid-Session Technical Analysis for May 6, 2021
The Euro is trading higher against the U.S. Dollar as global risk appetite improved while traders focused on U.S. economic data that may provide clues on when the U.S. Federal Reserve might dial back monetary stimulus. A dip in U.S. Treasury yields also weighed on demand for the U.S. Dollar.
At 12:23 GMT, the EUR/USD is trading 1.2052, up 0.0047 or +0.39%.
In economic news, Euro Zone retail sales rose by more than expected in March, data showed on Thursday, pointing to pent-up consumer demand as pandemic lockdowns ease.
The European Union’s statistics office Eurostat said on Thursday that retail sales in the 19 countries sharing the Euro jumped 2.7% month-on-month in March for a 12.0% year-on-year surge.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1986 will signal a resumption of the downtrend. A move through 1.2150 will change the main trend to up.
The short-term range is 1.2243 to 1.1704. The EUR/USD is currently trading on the strong side of its retracement zone at 1.2038 to 1.1974. This is giving it a slight upside bias. This zone is also new support.
The main range is 1.1603 to 1.2349. Its retracement zone at 1.1976 to 1.1888 is additional support.
The short-term and main retracement zones combine to form a support cluster at 1.1976 to 1.1974.
Another short-term range is 1.1704 to 1.2150. Its 50% level at 1.1927 is another potential support area. This level forms inside the main retracement zone.
The minor range is 1.2150 to 1.1986. Its 50% level at 1.2068 is the first upside target. Since the main trend is down, sellers could come in on a test of this level. They are going to try to form a potentially bearish secondary lower top.
Daily Swing Chart Technical Forecast
The early price action suggests the direction of the EUR/USD on Wednesday will be determined by trader reaction to 1.2038 and 1.2068.
Bearish Scenario
A sustained move under 1.2068 will indicate the presence of sellers. This could trigger a break into the minor bottom at 1.1986, followed by 1.1976.
Bullish Scenario
A sustained move over 1.2068 will signal the presence of buyers. This could trigger an acceleration to the upside with 1.2150 the next likely upside target.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
