EUR/USD Mid-Session Technical Analysis for June 7, 2019

The Euro is trading higher on Friday shortly after the release of a weaker-than-expected U.S. Non-Farm Payrolls report. The news raises the chances of a sooner-than-expected rate cut, pressuring demand for the U.S. Dollar. The report also drove the U.S. 10-year Treasury yield below 2.06%, its lowest level since September 2017, thereby making the dollar a less-attractive investment.

At 12:56 GMT, the EUR/USD is trading 1.1319, up 0.0042 or +0.38%.

Job creation plunged in May, with nonfarm payrolls up by just 75,000 even though the unemployment rate remained at a 50-year low of 3.6%. Traders were looking for an increase of 180,000. March’s report was revised lower to 153,000 and April’s was changed to 224,000 from 263,000. Average Hourly Earnings continued to rise in May, coming in at 0.2%. This was below the 0.3% forecast.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session. The next major swing chart target is the March 21 top at 1.1448. The main trend will change to down on a move through 1.1204.

The main range is 1.1448 to 1.1107. The EUR/USD is currently testing its retracement zone at 1.1278 to 1.1318. This zone is controlling the near-term direction of the Forex pair.

Daily Technical Forecast

Based on the current price at 1.1319 and the earlier price action, the direction of the EUR/USD the rest of the day is likely to be determined by trader reaction to the main Fibonacci level at 1.1318.

Bullish Scenario

A sustained move over 1.1318 will indicate the presence of buyers. The next target is the uptrending Gann angle at 1.1327. Overtaking and sustaining a rally over this angle will put the EUR/USD in an extremely bullish position. If this move creates enough upside momentum then look for the rally to possibly extend into the downtrending Gann angle at 1.1377. This is the last potential resistance angle before the 1.1448 main top.

Bearish Scenario

A sustained move under 1.1318 will signal the presence of sellers. This could drive the EUR/USD into the downtrending Gann angle at 1.1306. Crossing to the weak side of this angle could drive the Forex pair into the main 50% level at 1.1278.

The 50% level at 1.1278 has to hold as support or sentiment will shift to the downside with the next target angle coming in at 1.0997.