The Euro is trading flat early Wednesday after posting a modest gain the previous session on lackluster volume. The single currency is being pressured by rising U.S. Treasury yields amid strong expectations of a series of aggressive rate hikes by the U.S. Federal Reserve. Meanwhile, the European Central Bank (ECB) remains dovish with no timetable to raise rates.
At 0:04 GMT, the EUR/USD is at 1.0789, unchanged. On Tuesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $99.96, up $0.05 or +0.05%.
In the U.S. on Tuesday, 10-year inflation-linked bond yields rose to within touching distance of turning positive for the first time in two years. In other news, Building Permits and Housing Starts came in better than the forecasts and previous readings.
While in Europe, investors continued to fret over the economic impact of the war in Ukraine on the Euro Zone economy.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.0758 will signal a resumption of the downtrend. A move through 1.1185 will change the main trend to up.
The minor trend is also down. A trade through 1.0923 will change the minor trend to up. This will shift momentum to the upside.
The minor range is 1.0923 to 1.0758. Its pivot at 1.0841 is the nearest resistance. The second minor range is 1.1185 to 1.0758. If the minor trend changes to up then look for a test of its pivot at 1.0972.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD early Wednesday will be determined by trader reaction to 1.0796
A sustained move under 1.0796 will indicate the presence of sellers. If this produces enough downside momentum then look for the selling to extend into last week’s low at 1.0758.
Taking out 1.0758 will indicate the selling pressure is getting stronger. This could trigger an acceleration or a grinding break into the March 23, 2020 main bottom at 1.0636. This is known as the “Pandemic Low”.
A sustained move over 1.0796 will signal the presence of buyers. Overtaking the previous bottom at 1.0806 will indicate the buying is getting stronger with the pivot at 1.0841 the next target. This is a potential trigger point for an acceleration to the upside.
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