EUR/USD Mid-Session Technical Analysis for June 16, 2021

The Euro is trading nearly flat on Wednesday, suggesting traders are being cautious ahead of the release of the latest Federal Reserve monetary policy decision, economic projections and a press conference by Chairman Jerome Powell at 18:00 GMT. Investors will be looking for any sign of response to the recent jump in consumer and producer inflation.

At 11:37 GMT, the EUR/USD is trading 1.2119, down 0.0008 or -0.006%.

The Fed is widely expected to acknowledge the first conversations among its policymakers about when and how fast to pare back the massive bond-buying program launched in 2020, but most investors think the Fed will refrain from any hints of starting tapering its stimulus in the near future.

Traders will be listening to the news conference after the Federal Open Market Committee (FOMC) meeting for any change in tone from Fed Chair Jerome Powell about whether the inflation is likely to be temporary or longer-lasting.

If Powell’s tone is hawkish, look for the EUR/USD to weaken. A dovish Powell could trigger a short-covering rally. Traders feel that the Fed is moving closer to tapering, they just aren’t sure about when, which puts the bias to the downside.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.2093 will signal a resumption of the downtrend with the 1.2052 main bottom the next likely downside target. A move through 1.2218 will change the main trend to up.

The short-term range is 1.1986 to 1.2266. The EUR/USD is currently straddling its 50% level at 1.2125.

The minor range is 1.2218 to 1.2093. Its 50% level at 1.2155 is the nearest upside target and potential resistance since the main trend is down.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to the short-term 50% level at 1.2125.

Bearish Scenario

A sustained move under 1.2125 will indicate the presence of sellers. The first downside target is this week’s low at 1.2093. Taking out this level could trigger an acceleration into the nearest main bottom at 1.2052, followed by a longer-term 50% level at 1.2027.

Bullish Scenario

A sustained move over 1.2125 will signal the presence of buyers. This could trigger a quick rally into 1.2155. Look for sellers on the first test of this level. Overcoming it, however, will indicate the short-covering is getting stronger. This could trigger an acceleration into the nearest main top at 1.2218. Taking out this level will change the main trend to up.