EUR/USD Mid-Session Technical Analysis for October 23, 2020

James Hyerczyk
·2 min read

The Euro is trading higher against the U.S. Dollar on Friday as investors waited for a breakthrough in stimulus talks in Washington. Uncertainty over the outcome of the presidential election is also providing support.

The single-currency was underpinned despite a drop in Euro Zone bond yields as business surveys in France and Germany showed the impact of the second wave of COVID-19 infections in the bloc’s two biggest economies.

At 12:36 GMT, the EUR/USD is trading 1.1854, up 0.0036 or +0.30%.

According to Reuters, a Joe Biden victory, which polls predict, will probably drive further dollar weakness, because he is expected to spend more on coronavirus aid than Trump.

However, betting markets showed a small movement in Trump’s favor in the immediate aftermath of the debate, bookmaker Ladbrokes said on Twitter on Friday – which helped the dollar strengthen a little. Nonetheless, it did create some uncertainty, which could escalate as the November 3 election date approaches.

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 1.1688. If buyers take out 1.1881 then 1.1787 will become the new main bottom and change in trend price.

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 potential support. Today’s intraday low is 1.1787.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1859.

Bullish Scenario

A sustained move over 1.1859 will indicate the presence of buyers. The first upside target is the main top at 1.1881. Taking out this top could trigger an acceleration into the next main top at 1.1917.

Bearish Scenario

A sustained move under 1.1859 will signal the presence of sellers. This could lead to a quick test of 1.1834, followed by 1.1811.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire