EUR/USD Mid-Session Technical Analysis for October 29, 2020

James Hyerczyk
·2-min read

The Euro is trading lower on Thursday after European Central Bank President Christine Lagarde said rising COVID-19 cases and government measures to contain the pandemic have led to a “clear deterioration” in the Euro Zone’s near-term economic outlook.

While stimulus measures taken by the ECB since March are helping to underpin economic activity, risks are “clearly” tilted to the downside, she told the bank’s post-meeting news conference.

New staff macroeconomic projections in December will allow the ECB to make a thorough assessment of how it should recalibrate its policy response, she said.

At 14:50 GMT, the EUR/USD is trading 1.1682, down 0.0065 or -0.55%.

In other news, coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday.

Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department’s initial estimate for the period.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier today when sellers took out the previous swing bottom at 1.1688.

The EUR/USD is currently testing a retracement zone at 1.1691 to 1.1616. Trader reaction to this area will determine the near-term direction of the Forex pair.

On the upside, the resistance zone is 1.1811 to 1.1859.

Short-Term Outlook

The direction of the EUR/USD into the close is likely to be determined by trader reaction to the main 50% level at 1.1691.

Bearish Scenario

A sustained move under 1.1691 will indicate the presence of sellers. Taking out 1.1688 could trigger the start of an acceleration to the downside with the next major target a support cluster at 1.1616 to 1.1612.

Bullish Scenario

It won’t change the main trend to up, but a sustained move over 1.1691 could trigger the start of a 2 to 3 day counter-trend rally.

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

This article was originally posted on FX Empire