EUR/USD Mid-Session Technical Analysis for December 3, 2021

The Euro is edging lower on Friday against the U.S. Dollar as investors digested disappointing U.S. jobs data. The single-currency initially strengthened on the news but moved lower as investors debated whether the report was weak enough to encourage the Fed to leave the pace of tapering at current levels at its December 14-15 policy meeting.

At 14:50 GMT, the EUR/USD is trading 1.1288, down 0.0012 or -0.10%.

Nonfarm payrolls increased by just 210,000 for the month of November, the Labor Department said Friday. That compares to a Dow Jones estimate of 581,000 jobs for the month. The big miss came even as the labor force participation rate increased for the month to 61.8%, its highest level since March 2020. However, the unemployment rate fell sharply to 4.2%, versus an expectation of 4.5%.

Meanwhile, some investors took solace in the fact that wage growth wasn’t as hot as feared. Average hourly earnings rose 0.3% month over month and 4.8% year over year. Economists were expecting a month-over-month gain of 0.4% and year-over-year jump of 5%.

The easing in the EUR/USD suggests investors don’t think the news is bearish enough to derail the Fed’s plans at a faster tapering.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher.

A trade through 1.1186 will signal a resumption of the downtrend. A move through 1.1608 will change the main trend to up.

The minor trend is up. This is controlling the momentum.

The EUR/USD is currently straddling a long-term Fibonacci level at 1.1291. Additional support is a minor pivot at 1.1284.

On the upside, additional resistance is a pair of 50% levels at 1.1397 and 1.1439.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Friday is likely to be determined by trader reaction to 1.1291 and 1.1284.

Look for a bullish tone to develop on a sustained move over 1.1291, and for the downside bias to resume on a sustained move under 1.1284.

Bearish Scenario

A sustained move under 1.1284 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into 1.1235. Taking out this level will indicate the selling pressure is getting stronger with a pair of main bottoms at 1.1186 and 1.1168 the next downside targets.

Bullish Scenario

A sustained move over 1.1291 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into 1.1332. Overcoming it, could trigger another surge into 1.1383.