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James Hyerczyk
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EUR/USD

The Euro is trading flat against the U.S. Dollar for a second session on Tuesday as traders continue to position themselves ahead of Friday’s important U.S. Non-Farm Payrolls report. With Federal Reserve members and Chairman Jerome Powell clearly emphasizing the labor market in last week’s monetary policy statement and post-meeting press conference, the payrolls report could set the tone in the Forex market for the next few months.

At 11:01 GMT, the EUR/USD is trading 1.1887, up 0.0015 or +0.13%.

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Some traders think the Fed will make an announcement about tapering its bond purchases at the central bankers’ summit at Jackson Hole, Wyoming in mid-August. Others think the Fed will wait until its next meeting on September 21-22 with some Fed members saying they want to see September’s job market numbers before making a decision.

In other news, the Euro showed little reaction to a Purchasing Managers Index (PMI) reading of July manufacturing at 62.8, a touch above the “flash” number of 62.6.

Daily EUR/USD

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.

Momentum will shift to the downside on a trade through 1.1851. This move will confirm Friday’s potentially bearish closing price reversal top.

The short-term range is 1.1975 to 1.1752. The EUR/USD is currently testing its retracement zone at 1.1864 to 1.1890.

The minor range is 1.1752 to 1.1909. Its retracement zone at 1.1830 to 1.1812 is a potential downside target and support area.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1864.

Bullish Scenario

A sustained move over 1.1864 will indicate the presence of buyers. The first upside target is 1.1890, followed by 1.1909. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1864 will signal the presence of sellers. This could trigger a break 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.

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