EUR/USD Mid-Session Technical Analysis for August 2, 2021
The Euro is inching higher on Monday in a mostly lackluster trade with investors perhaps already preparing for Friday’s important U.S. Non-Farm Payrolls report that could determine the direction of the single currency over the next several weeks.
Last week, the common currency rose sharply after Federal Reserve Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”
Federal Governor Lael Brainard echoed those comments on Friday, saying “employment has some distance to go.”
At 13:32 GMT, the EUR/USD is trading 1.1879, up 0.0007 or +0.06%.
In economic news, manufacturing activity across the Euro Zone continued to expand at a blistering pace in July as the reopening of the economy led to rocketing demand, but supply bottlenecks sent input costs soaring, a survey showed on Monday.
IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) dipped to 62.8 in July from June’s record high of 63.4 but was above an initial 62.6 “flash” estimate.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1909 will signal a resumption of the uptrend. A move through 1.1752 will change the main trend to down.
The minor range is 1.1752 to 1.1909. Its retracement zone at 1.1803 to 1.1812 is potential support.
The short-term range is 1.1975 to 1.1752. The EUR/USD is currently trading inside its retracement zone at 1.1864 to 1.1890.
On the upside, a pair of 50% levels at 1.1985 and 1.2027 are potential upside targets.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1864 and 1.1890.
A sustained move over 1.1890 will indicate the presence of buyers. Taking out 1.1909 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target a resistance cluster at 1.1975 to 1.1985.
A sustained move under 1.1864 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at 1.1830 to 1.1812. Since the main trend is up, buyers are likely to come in on a test of this area.