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EUR/USD Mid-Session Technical Analysis for January 8, 2021

By:
James Hyerczyk
Updated: Jan 8, 2021, 18:32 UTC

Watch the price action and read the order flow on a test of 1.2187 especially if it looks like 10-year Treasury Note futures are poised to rebound.

EUR/USD

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The Euro is trading lower at the mid-session on Friday with most of the pressure coming from a jump in U.S. Treasury yields. The market did uptick slightly after the release of a dismal December U.S. payrolls report highlighted the need for further stimulus measures, but that move was quickly killed off as yields continued to strengthen.

At 17:49 GMT, the EUR/USD trading 1.2231, down 0.0038 or -0.31%.

The 10-year Treasury yield climbed on Friday even after the jobs report for December showed an unexpected loss. The yield on the benchmark 10-year Treasury note gained 5 basis points to 1.124%, its highest level since March 30. The yield on the 30-year Treasury bond also rose 4 basis points to 1.893%, a level last seen in March.

In economic news, the Labor Department reported Friday that nonfarm payrolls fell by 140,000 in December amid a worsening pandemic. The number came in below expectations for 50,000 from economists surveyed by Dow Jones, and it also marked the first job loss since April. The unemployment rate was 6.7% in December, compared to the 6.8% estimate. Average Hourly Earnings were better than expected at 0.8%. Traders were looking for a 0.2% increase.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2349 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.2025.

The minor range is 1.2025 to 1.2349. Its 50% level at 1.2187 is the next likely downside target. Since the main trend is up, buyers are likely to come in on a test of this level.

The short-term range is 1.1800 to 1.2349. Its 50% level at 1.2074 is controlling the near-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

The EUR/USD is likely to continue to slide as long as Treasury yields are firming. However, watch the price action and read the order flow on a test of 1.2187 especially if it looks like 10-year Treasury Note futures are poised to rebound.

Look for a buy to set up on a test of 1.2187 and use a dip in Treasury yields as your trigger for a minor retracement of the two day break from 1.2349.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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