EUR/USD Mid-Session Technical Analysis for December 17, 2020

The Euro is trading higher on Thursday as the U.S. Dollar fell to its lowest in over two years against major currencies after the Federal Reserve stuck to its current policy guns while hopes for more U.S. stimulus and a post-Brexit trade deal boosted appetite for riskier currencies.

Meanwhile, Euro Zone annual inflation was negative for a fourth consecutive month in November, matching a four-year low, as energy prices were around 8% lower than a year earlier.

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At 13:26 GMT, the EUR/USD is trading 1.2247, up 0.0046 or +0.38%.

The Euro was boosted by a drop in the dollar as congressional negotiators were closing in on a $900 billion COVID-19 aid bill in the United States, according to lawmakers and aides, boosting stock markets across the globe.

Further support for the Euro was the U.S. Federal Reserve, which said on Wednesday it would keep funneling cash into financial markets until the U.S. economic recovery is secure. The promise of long-term help fell short of some investors hopes of an immediate move.

[fx-image src=/2020/12/Daily-EURUSD-11.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2020/12/Daily-EURUSD-11.jpg originalWidth=1920 ratio=1.99]Daily EUR/USDDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out yesterdays high. The main trend will change to down on a trade through 1.2059.

[fx-article-ad]Daily Swing Chart Technical Forecast

The direction of the EUR/USD the rest of the session will be determined by trader reaction to 1.2200.

Bullish Scenario

A sustained move over 1.2200 will indicate the presence of buyers. Continuing to grind out higher-highs and higher-lows should produce the upside momentum needed to challenge the April 17, 2018 main top at 1.2413 over the near-term.

Bearish Scenario

A sustained move under 1.2200 will signal the presence of sellers. This would put the EUR/USD in a position to post a potentially bearish closing price reversal top.

If confirmed, this chart pattern could trigger the start of a 2 to 3 day break, or a 50% to 61.8% correction of its recent rally.

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