EUR/USD Mid-Session Technical Analysis for July 2, 2021

The Euro is trading lower on Friday shortly before the release of the U.S. Non-Farm Payrolls report that could influence Fed policy and force policymakers to make changes to its current stimulus package.

A strong report could drive the single-currency into its March 31 bottom at 1.1704. Sellers are also responding to enhanced expectations that the European Central Bank (ECB) would embark on fresh easing as early as this month.

At 11:13 GMT, the EUR/USD is trading 1.1832, down 0.0018 or -0.15%.

Economists expect Non-Farm Payrolls grew by 706,000 jobs in June and that the unemployment rate fell to 5.6% from 5.8%, according to Dow Jones. If employers added as many jobs as expected, the print would top the 559,000 jobs created in May.

The average hourly wage is estimated to have jumped 0.3% on a month-over-month basis, and climbed 3.6% over the last 12 months. The government’s weekly report on first-time jobless claims, published Thursday morning, came in at 364,000 and set a pandemic-era low.

In other news, ECB President Christine Lagarde said in an interview published on Friday that the Euro Zone economy is beginning to rebound from a pandemic-induced slump but the recovery remains fragile. Lagarde also signaled she was not ready to wind down the Pandemic Emergency Purchase Program (PEPP) just yet.

Meanwhile, Euro Zone producer prices accelerated in May, driven by a surge in energy prices, data from the European Union’s statistics office Eurostat showed on Friday. Eurostat said prices at factory gate in the 19 countries sharing the Euro rose 1.3% month-on-month for a 9.6% year-on-year increase.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out the last main bottom at 1.1848. A trade through 1.1975 will change the main trend to up.

The minor range is 1.1975 to 1.1820. Its 50% level at 1.1898 is the nearest resistance.

If the main trend changes to up then look for a near-term surge into 1.2027 to 1.2043.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1849.

Bearish Scenario

A sustained move under 1.1849 will indicate the presence of sellers. If this move is able to create enough downside momentum then look for a near-term test of the March 31 main bottom at 1.1704.

Bullish Scenario

A sustained move over 1.1849 will signal the presence of buyers. If this generates enough upside momentum then look for a possible test of 1.1898. Look for sellers on the first test of this level. Overtaking it, however, could trigger a short-covering rally into 1.1975 over the near-term.