EUR/USD Mid-Session Technical Analysis for August 6, 2021

The Euro is trading lower against the U.S. Dollar on Friday shortly before the release of U.S. employment data at 12:30 GMT. Traders are pricing in a strong number that could support the case for faster U.S. monetary policy tightening at a time when the European Central Bank (ECB) is expected to hold policy steady while considering additional stimulus.

At 10:36 GMT, the EUR/USD is trading 1.1811, down 0.0020 or -0.17%.

The estimates ahead of the U.S. Non-Farm Payrolls report are all over the map, which could mean the actual number could be dud, with investors deciding to take the weekend to digest the numbers before making a trading decision.

Forecasts for jobs created last month vary widely, from about 350,000 to 1.6 million, but the consensus figure is 870,000 and traders think a number that size or larger would lift the dollar while something below 650,000 might hurt it.

In other news, Euro Zone bond yields ticked up on Friday with all eyes on the jobs data that is expected to set the tone for global markets.

Fears around the coronavirus Delta variant, concern that economic recovery is peaking, investors reversing bets against safe-haven bonds, and an accommodative tone among central banks all pushed yields sharply lower across the world in July.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of a potentially bearish closing price reversal top on July 30.

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. The EUR/USD is currently trading on the weak side of its retracement zone at 1.1830 to 1.1812.

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 Friday is likely to be determined by trader reaction to 1.1812.

Bearish Scenario

A sustained move under 1.1812 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly accelerate to the downside with 1.1752 the next potential downside target.

Bullish Scenario

A sustained move over 1.1812 will signal the presence of buyers. The first upside target is 1.1830. Overtaking this level could trigger an acceleration to the upside with targets layered at 1.1864, 1.1890 and 1.1909. The latter is a potential trigger point for an acceleration to the upside with the near-term target coming in at 1.1975 to 1.1985.

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