EUR/USD Mid-Session Technical Analysis for January 4, 2019

The Euro is trading lower against the U.S. Dollar, reversing earlier gains following the release of the stronger-than-expected U.S. Non-Farm Payrolls report. The headline number came in at 312,000 in December, well above the 176,000 forecast. Average Hourly Earnings jumped 3.2 percent annually and 0.4 percent over the previous month. The unemployment rate rose 3.9 percent as more workers joined the labor force.

At 1400 GMT, the EUR/USD is trading 1.1370, down 0.0024 or -0.21%.

The strong jobs data drove up U.S. Treasury yields which made the U.S. Dollar a more attractive investment, putting pressure on the Euro.

At 1515 GMT, traders will get the opportunity to react to comments from Fed Chair Jerome Powell. Look for volatility and a possible two-sided trade.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following Thursday’s closing price reversal bottom and subsequent confirmation earlier today.

A trade through 1.1309 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The EUR/USD is currently trading inside a major retracement zone, bounded by 1.1447 to 1.1185.

The main range is 1.1216 to 1.1586. The EUR/USD is currently straddling its retracement zone at 1.1401 to 1.1357. This zone is controlling the near-term direction of the Forex pair.

The short-term range is 1.1586 to 1.1309. If buyers can create enough upside momentum then look for a rally into its retracement zone at 1.1447 to 1.1480.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD is likely to be determined by trader reaction to the 50% level at 1.1401.

Bullish Scenario

A sustained move over 1.1401 will indicate the presence of buyers. The first target is today’s intraday high at 1.1419. Taking out this level could trigger a surge with 1.1447 the next upside target.

Bearish Scenario

A sustained move under 1.1401 will signal the presence of sellers. The first target is the Fibonacci level at 1.1357. If this level fails then look for an acceleration into 1.1309. Taking out this level should bring in another wave of selling pressure.