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James Hyerczyk
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EUR/USD

The Euro is trading higher and holding steady on Friday shortly after the release of the November U.S. Non-Farm Payrolls report. The data showed the U.S. economy added the fewest workers since the jobs recovery started six months ago, hindered by a resurgence in new COVID-19 cases that, together with a lack of more government relief money, threatens to reverse the recovery from the pandemic recession.

At 14:54 GMT, the EUR/USD is trading 1.2162, up 0.0016 or +0.13%.

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Non-Farm Payrolls increased by 245,000 jobs after rising by 610,000 in October, the Labor Department said on Friday. The fifth straight monthly slowdown in job gains left employment well below its February peak. While the unemployment rate fell to 6.7% from 6.9%, it has been biased down by people misclassifying themselves as being “employed but absent from work.”

Growing prospects for a U.S. economic stimulus package and the roll-out of COVID-19 vaccines boosted demand for riskier assets, taking the safe-haven U.S. Dollar to a 2-1/2-year low versus the Euro. The EUR/USD hit its highest level since April 2018 at 1.2178, a weekly gain of more than 1.5%.

In other news, German industrial orders rose more than expected on the month in October, data showed on Friday, raising hopes the manufacturing sector in Europe’s biggest economy started the fourth quarter on a solid footing during a second wave of the COVID-19 pandemic.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. An intraday rally through 1.2178 will reaffirm the uptrend. The main trend will change to down on a move through 1.1800. This is highly unlikely, but the EUR/USD is trading inside the window of time for a closing price reversal top.

If 1.1800 to 1.2178 becomes the near-term range then 1.1989 to 1.1944 becomes the next potential downside target area.

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Daily Swing Chart Technical Forecast

Given the prolonged move up in terms of price and time, the direction of the EUR/USD into the close is likely to be determined by trader reaction to 1.2147.

Bullish Scenario

A sustained move over 1.2147 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to take another run at 1.2178. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.2147 will signal the presence of sellers. Closing under this level will form a potentially bearish closing price reversal top. This won’t change the trend to down, but if confirmed, it could trigger the start of a 2-3 day correction with 1.1989 to 1.1944 the first target zone.

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