EUR/USD Mid-Session Technical Analysis for December 22, 2020

The Euro is trading nearly flat against the U.S. Dollar on Tuesday, but the price action suggests a tentative trade as a new coronavirus strain spread across Britain, closing key trade routes and creating a supply-chain nightmare while time was running out to strike a post-Brexit trade deal.

At 14:07 GMT, the EUR/USD is trading 1.2237, up 0.0002 or +0.02%.

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Low liquidity could still be a problem today, following Monday‘s whipsaw trade. Many major bank players have logged out for the year. This may have exaggerated the speed and size of the dollar’s gains against other currencies. Thin trading conditions, coupled with surprise headlines could lead to more of the same kind of trading on Tuesday.

[fx-image src=/2020/12/Daily-EURUSD-14.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2020/12/Daily-EURUSD-14.jpg originalWidth=1920 ratio=1.99]Daily EUR/USDDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2273 will signal a resumption of the uptrend. The main trend changes to down on a move through 1.2059.

The minor trend is also up. A trade through 1.2130 will change the minor trend to down, shifting momentum to the downside.

The minor range is 1.2273 to 1.2130. Its 50% level at 1.2202 is support.

The second minor range is 1.2059 to 1.2273. Its 50% level at 1.2166 is the last potential support before the minor bottom.

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

The early price action suggests the direction of the EUR/USD on Monday will be determined by trader reaction to 1.2202.

Bullish Scenario

A sustained move over 1.2202 will indicate the presence of buyers. If this move can create enough upside momentum then look for traders to attempt a breakout over 1.2273, but the low volume could pose a problem for the bulls. Its hard to buy strength when the volume is low.

Bearish Scenario

A sustained move under 1.2202 will signal the presence of sellers. The first downside target is 1.2166. If this fails then look for prices to drift into 1.2130. This price is a potential trigger point for an acceleration to the downside.

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