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

The Euro is under pressure late Monday on the view that the U.S. has an advantage in growing its economy and vaccinating its population against COVID-19.

Investors may have reached that conclusion after German reported that retail sales plunged by an unexpected 9.6% in December after tighter lockdowns last year to curb the spread of COVID-19 choked consumer spending in Europe’s largest economy.

At 18:43GMT, the EUR/USD is trading 1.2069, down 0.0066 or -0.55%.

U.S.-based strategists at Wells Fargo Securities wrote, “We think USD strength still has room to run.” That’s especially true against more volatile securities, they added.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 1.2054 will change the main trend to down. A move through 1.2190 will signal a resumption of the uptrend.

The main range is 1.1800 to 1.2349. The EUR/USD is currently testing its retracement zone at 1.2074 to 1.2010. This zone stopped the selling recently at 1.2059 and on January 18 at 1.2054.

The minor range is 1.2190 to 1.2059. Its 50% level or pivot at 1.2125 is new resistance.

The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is controlling the near-term direction to the upside.

Short-Term Outlook

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to the main 50% level at 1.2074.

Bearish Scenario

A sustained move under 1.2074 will indicate the presence of sellers. Taking out the next main bottom at 1.2054 will indicate the selling is getting stronger. The main bottom at 1.2025 is the last potential support before the Fibonacci level at 1.2010. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 1.2074 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into 1.2202.