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

The Euro is edging lower in a lackluster trade on Tuesday as investors waited for economic data to indicate the future direction of the greenback and the common currency.

On Friday, a measure of U.S. inflation closely watched by the Fed posted its biggest annual rise since 1992. However, this was downplayed by Fed officials who have said repeatedly they expect price pressures to be transitory and monetary stimulus to stay in place for some time, but investors are wary that a strong pandemic recovery could force the Fed’s hand.

At 14:15 GMT, the EUR/USD is trading 1.2221, down 0.0004 or -0.03%.

Traders are showing little reaction to data which showed Euro Zone inflation surged past the European Central Bank’s target in May.

Later today, investors will get the opportunity to react to ISM manufacturing new orders, prices and employment for May as well as May’s Dallas Fed Manufacturing Index. All of the reports are expected to confirm the current economic recovery.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2266 will signal a resumption of the uptrend. The main trend will change to down on a move through the new main bottom at 1.2133.

The minor range is 1.2266 to 1.2133. The EUR/USD is currently trading on the strong side of its 50% level at 1.2200, making it minor support.

The first short-term support is a 50% level at 1.2159. The second short-term support is a 50% level at 1.2126.

Last week’s low at 1.2133 fell between the two short-term 50% levels.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 1.2200.

Bullish Scenario

A sustained move over 1.2200 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a possible retest of the main top at 1.2266.

Bearish Scenario

A sustained move under 1.2200 could trigger a labored break with potential downside targets coming in at 1.2159, 1.2133 and 1.2126.

Side Notes

We could be looking at a sideways trade ahead of Friday’s U.S. Non-Farm Payrolls report that could set the tone of the market for a month. So be careful selling weakness and buying strength.