EUR/USD Mid-Session Technical Analysis for July 1, 2021

The Euro is inching higher against the U.S. Dollar on Thursday, shortly before a slew of U.S. economic reports. After an initial reaction to the news, the single-currency is likely to settle into a trading range as traders prepare for Friday’s important Non-Farm Payrolls report.

At 11:31 GMT, the EUR/USD is trading 1.1870, up 0.0010 or +0.08%.

The latest data on weekly jobless claims will be released Thursday at 12:30 GMT. Economists polled by Dow Jones are expecting initial claims for unemployment totaled 390,000 last week, after totaling 411,000 for the week ended June 19.

Traders will also get the opportunity to react to the Challenger Job Cuts report, ISM Manufacturing PMI and Construction Spending.

On Friday, the government will release its monthly labor report. The Non-Farm Payrolls report for June is expected to show the economy added about 700,000 jobs. However, there are some whispers that some traders expect to see a figure north of 1 million jobs.

In other news, Euro Zone manufacturing activity expanded at its fastest pace on record in June, according to a survey on Thursday which also showed factories faced the steepest rise in raw materials costs in well over two decades.

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) rose to 63.4 in June from May’s 63.1, above an initial 63.1 “flash” estimate and the highest reading since the survey began in June 1997.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Wednesday when sellers took out the last main bottom at 1.1848. A move through the intraday low at 1.1838 will signal a resumption of the downtrend. The main trend will change to up on a trade through the last main top at 1.1975.

The minor range is 1.1975 to 1.1838. Its 50% level at 1.1907 is the nearest resistance.

The main range is 1.2349 to 1.1704. If the main trend changes to up then look for the buying to possibly extend into its 50% level at 1.2027. This price is controlling the longer-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1860.

Bearish Scenario

A sustained move under 1.1860 will indicate the presence of sellers. This could trigger a break into the intraday low at 1.1838. Taking out this level could create the downside momentum needed to challenge the March 31, 2021 main bottom at 1.1704 over the near-term.

Bullish Scenario

A sustained move over 1.1860 will signal the presence of buyers. If this move creates enough upside momentum then look for a test of the pivot at 1.1907. Be careful buying strength today, however. Since this is likely short-covering and position-squaring ahead of Friday’s jobs report.