James Hyerczyk
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The Euro is edging higher against the U.S. Dollar on Thursday after closing lower the previous session following hawkish comments from a high-ranking Federal Reserve official. The volatile price action the past two sessions suggests investor indecision and impending volatility. It also highlights the importance investors have placed on Friday’s U.S. Non-Farm Payrolls report.

At 11:35 GMT, the EUR/USD is trading 1.1855, up 0.0017 or +0.15%. This is up from an intraday low of 1.1828.

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Yesterday’s rally came about after Fed Vice Chair Richard Clarida said conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023.

Of course there is still much uncertainty to his prediction since the markets aren’t sure about the impact of the spread of the Delta variant. Wednesday’s weaker-than-expected ADP also created more uncertainty ahead of the Friday’s government report.

The key report today is the weekly initial jobless claims, due to be released at 12:30 GMT. It is expected to show 382K new filers in the week-ending July 30.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since last Friday’s closing price reversal top. A trade through 1.1909 will negate the closing price reversal top and 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 support. This area stopped the selling earlier in the session at 1.1828.

The short-term range is 1.1975 to 1.1752. Its retracement zone at 1.1864 to 1.1890 is resistance and a potential trigger point for an acceleration to the upside.


Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1830.

Bullish Scenario

A sustained move over 1.1830 will indicate the presence of buyers. This could lead to a labored rally due to low volume into 1.1864, 1.1890 and 1.1909. Taking out 1.1909 with strong volume could trigger an acceleration into a resistance cluster at 1.1975 to 1.1985 over the near-term.

Bearish Scenario

A sustained move under 1.1830 will signal the presence of sellers. The first downside target is 1.1812. If this price fails as support then look for the selling pressure to increase. This could lead to an eventual test of the main bottom at 1.1752.

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