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James Hyerczyk
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EUR/USD

The Euro is edging higher against the U.S. Dollar on Wednesday after U.S. private payrolls increased far less than expected in July, likely constrained by shortages of workers and raw materials.

Private payrolls rose by 330,000 jobs last month, the ADP National Employment Report showed on Wednesday. Data for June was revised slightly down to show 680,000 jobs added instead of the initially reported 692,000. Economists polled by Reuters had forecast private payrolls would increase by 695,000 jobs.

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Treasury yields fell on the ADP news, making the U.S. Dollar a less-attractive asset.

At 12:34 GMT, the EUR/USD is trading 1.1874, up 0.0010 or +0.08%.

In economic news, Euro Zone business activity roared in July, expanding at its fastest pace in 15 years, as the lifting of more coronavirus restrictions and an accelerated vaccine drive injected life into the bloc’s dominant service industry, a survey showed.

Additionally, Euro Zone retail sales rose roughly in line with expectations in June though less steeply than in May, when consumers flocked back to shops after coronavirus restrictions were eased.

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.

The minor range is 1.1752 to 1.1909. Its retracement zone at 1.1830 to 1.1812 is potential support. Since the main trend is up, buyers are likely to come in on a test of this area.

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. While currently acting like resistance, the upper level of this zone is a potential trigger point for an acceleration to the upside.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday 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 the minor top at 1.1909.

Taking out 1.1909 will indicate the presence of buyers and could trigger an acceleration into 1.1975 to 1.1985 if the volume were better.

Bearish Scenario

A sustained move under 1.1864 will signal the presence of sellers. This could trigger a further break into 1.1830 to 1.1812. Buyers could step in on a test of this level.

Side Notes

The ADP report came in weaker than expected, making it bullish for the EUR/USD. Gains could be limited as traders look toward Thursday’s Weekly Jobless Claims data and Friday’s U.S. Non-Farm Payrolls report.

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