EUR/USD Mid-Session Technical Analysis for February 23, 2021

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James Hyerczyk
·2 min read
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The Euro is inching lower on Tuesday after giving up earlier gains on position-squaring ahead of the testimony of Federal Reserve Chairman Jerome Powell before the Senate Banking Committee. Investors will be looking for any potential changes to the central bank’s dovish outlook in recent months. This could be a market moving event because rising bond yields and accompanying inflation fears are adding a level of drama.

At 14:11 GMT, the EUR/USD is trading 1.2148, down 0.0008 or -0.06%.

Analysts expect Powell, who testifies before Congress at 1500 GMT, to provide some reassurance that the Fed will tolerate higher inflation without rushing to raise rates. That might calm bond markets and eventually weigh on the dollar, they said.

“Mr. Powell will very likely reiterate that the Fed is a long way from meeting its goals and that it will take some time before “sufficient progress” has been made to taper its bond purchase program,” UniCredit analysts said.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart but momentum is trending higher. The main trend will change to up on a trade through the next swing top at 1.2190. A trade through 1.1952 will signal a resumption of the downtrend.

The minor trend is up. It changed to up earlier today when buyers took out 1.2170. This shifted momentum to the upside. A trade through 1.2023 will change the minor trend to down.

The short-term range is 1.2349 to 1.1952. The EUR/USD is currently testing its retracement zone at 1.2151 to 1.2197. This zone is controlling the near-term direction of the EUR/USD.

The main retracement zone support is 1.2074 to 1.2010.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the short-term 50% level at 1.2151.

Bullish Scenario

A sustained move over 1.2151 will indicate the presence of buyers. The first two upside targets are 1.2190 to 1.2197. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.2151 will signal the presence of sellers. This is a potential trigger point for an acceleration into 1.2074.

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

This article was originally posted on FX Empire