EUR/USD Mid-Session Technical Analysis for July 5, 2018

The Euro is trading higher shortly before the U.S. opening on Thursday. Volume looks a little light and the buying tentative as investors shake-off the post-holiday cobwebs. Traders could also be sitting on the sidelines ahead of today’s release of the latest Fed monetary policy meeting minutes at 1800 GMT.

At 0950 GMT, the EUR/USD is trading 1.1687, up 0.0032 or +0.28%.

Prior to the Fed minutes, traders will get their first taste of what to expect from Friday’s U.S. Non-Farm Payrolls report in the form of the ADP Non-Farm Employment Change report. It is expected to show the private sector of the economy added 190K new jobs in June. Weekly Unemployment Claims are expected to hold steady at 225K and ISM Non-Manufacturing PMI is estimated at 58.3.

As far as the minutes are concerned, most investors expect it to show the Fed remains locked-in on at least two more rate hikes in 2018. The Federal Open Market Committee probably also discussed the potential impact of the tariffs and trade disputes on the economy, however, they’re probably not too concerned at this time.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend will turn up on a trade through 1.1721.

The main range is 1.1851 to 1.1509. Its retracement zone at 1.1680 to 1.1720 is currently being tested. This zone is controlling the near-term direction of the EUR/USD. Up above it is another 50% target at 1.1753.

Daily Technical Forecast

Based on the early trade, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 1.1680.

A sustained move over 1.1680 will indicate the presence of buyers. This could lead to a labored rally with targets at 1.1701, 1.1709 and 1.1720.

The trigger point for a breakout to the upside is 1.1720. Overtaking this level could fuel a surge into 1.1753. This is followed by a downtrending Gann angle at 1.1776.

A sustained move under 1.1680 will signal the presence of sellers. If this move generates enough selling pressure, we could see an eventual test of an uptrending Gann angle, currently at 1.1609.

Basically, look for a strong upside bias to develop on a sustained move over 1.1720 and for a downside bias to develop on a sustained move under 1.1680.