EUR/USD Mid-Session Technical Analysis for June 2, 2022

The Euro is trading higher on Thursday, reversing some of their recent losses against the U.S. Dollar, as investors reacted to a dip in U.S. Treasury yields. Weaker than expected private sector payrolls data is the catalyst behind the single-currency’s strength. Traders could also be squaring positions ahead Friday’s major Non-Farm Payrolls report.

At 14:27 GMT, the EUR/USD is trading 1.0703, up 0.0051 or +0.48%. The Invesco CurrencyShares Euro Trust ETF (FXE) is at $98.61, down $0.74 or -0.74%.

The U.S. Dollar weakened against the Euro after the U.S. 10-year Treasury yield dipped Thursday, as investors looked to employment data showing the slowest pace of job creation in the pandemic recovery so far.

Private sector employment rose by just 128,000 in May, payroll processing firm ADP reported Thursday. That fell well short of the 299,000 Dow Jones estimate and marked a decline from the downwardly revised 202,000 in April, initially reported as a gain of 247,000.

Rates fell as traders took the ADP report to mean the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.0787 will signal a resumption of the uptrend. A move through 1.0354 will change the main trend to down.

The minor trend is down. It turned down on Wednesday, shifting momentum to the downside.

The main range is 1.1185 to 1.0354. Its retracement zone at 1.0770 to 1.0868 is resistance. This zone stopped the rally at 1.0787 on Monday.

The intermediate range is 1.0936 to 1.0354. The EUR/USD is currently testing its retracement zone at 1.0645 to 1.0714.

The short-term range is 1.0354 to 1.0787. Its retracement zone at 1.0571 to 1.0519 is the nearest downside target.

Daily Swing Chart Technical Forecast

Trader reaction to 1.0714 will determine the direction of the EUR/USD into the close on Thursday.

Bullish Scenario

A sustained move over 1.0714 will indicate the presence of buyers. If this creates enough upside momentum then look for a late session surge into the main 50% level at 1.0770, followed by the main top at 1.0787.

Taking out 1.0787 could trigger an acceleration into the main Fibonacci level at 1.0868.

Bearish Scenario

A sustained move under 1.0714 will signal the presence of sellers. This could trigger a break into the short-term 50% level at 1.0645. This level is a potential trigger point for an acceleration to the downside with the short-term zone at 1.0571 – 1.0519 the next target.