EUR/USD Mid-Session Technical Analysis for March 5, 2021

The Euro is trading at a multi-month low against the U.S. Dollar shortly before the release of the February U.S. Non-Farm Payrolls report on Friday at 13:30 GMT. The selling is a follow-through move related to Thursday’s steep sell-off that was fueled after Federal Reserve Chairman Jerome Powell expressed no concern about a recent sell-off in bonds and stuck to his stance of keeping interest rates low for a long time.

At 11:55 GMT, the EUR/USD is trading 1.1936, down 0.0037 or -0.31%. The low of the session at 1.1914 was last traded on November 27, 2020.

All eyes will be on the February jobs report. Economists expect to see that 210,000 payrolls were added in February, compared to just 49,000 in January, according to Dow Jones.

Good news for the U.S. economy could be bad news for the Euro. A Better-than-expected headline number could drive Treasury yields higher, which would also support the U.S. Dollar while weighing on demand for the single-currency.

Traders should watch the Treasury yields for guidance. There are too many Non-Farm guesses to get an accurate read as to what is a good number or a bad number. Be prepared for whipsaw action in the EUR/USD. The report is often a dud and may be used as an excuse by short-sellers to book this week’s gains.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out yesterday’s low. The next major target is the November 23, 2020 main bottom at 1.1800.

The main trend will change to up on a move through 1.2243. This is highly unlikely, but there is the possibility of a closing price reversal bottom or the start of a short-term correction.

The main range is 1.1800 to 1.2349. The EUR/USD is currently trading on the weak side of its retracement zone at 1.2010 to 1.2074. This zone is controlling the longer-term trend.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday will be determined by trader reaction to 1.1973.

Bearish Scenario

A sustained move under 1.1973 will indicate the presence of sellers. Taking out the intraday low will indicate the selling pressure is getting stronger. This move could trigger the downside momentum needed to challenge the main bottom at 1.1800.

Bullish Scenario

A sustained move over 1.1973 will signal the presence of buyers. This could trigger a short-covering rally into the main Fibonacci level at 1.2010. Since the main trend is down, sellers could come in on the first test of this level.

Overcoming 1.2010 could trigger an acceleration to the upside with the main 50% level at 1.2074 the next key upside target.

For a look at all of today’s economic events, check out our economic calendar.