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

The Euro is trading lower against the U.S. Dollar on Friday, ahead of a key U.S. jobs report that could sway the timing of Federal Reserve interest rate increases. Also weighing on the common currency are comments from European Central Bank (ECB) President Christine Lagarde earlier in the week.

At 10:33 GMT, the EUR/USD is trading 1.1533, down 0.0022 or -0.19%.

The Fed has set a labor market recovery as a condition for rate hikes. U.S. Non-Farm Payrolls due at 12:30 GMT are forecast by economists to show a 450,000 surge in jobs in October, following a 194,000 rise in the prior month.

On Wednesday, ECB President Lagarde pushed back against market bets for a rate hike as soon as next October and said it was very unlikely such a move would occur in 2022.

Traders are currently pricing in 450,000 new jobs in today’s NFP report. However, Fed Chair Powell said on Wednesday he would like to see a number in the 500,000 to 600,000 range. With the EUR/USD in a vulnerable position, I think a number north of 600,000 would sink the single-currency below 1.1500.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1524 will reaffirm the downtrend. A move through 1.1692 will change the main trend to up.

On the upside, the nearest resistance is 1.1608, followed closely by 1.1640.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1573.

Bearish Scenario

A sustained move under 1.1573 will indicate the presence of sellers. Taking out 1.1528 will be the first sign of weakness, while a move through 1.1524 will reaffirm the downtrend. This is a potential trigger point for an acceleration to the downside with the July 16, 2020 main bottom at 1.1371 the next likely target.

Bullish Scenario

A sustained move over 1.1573 will signal the presence of buyers. If this move creates enough upside momentum then look for a surge into 1.1608.

Since the main trend is down, sellers could come in on the first test of this level. Overcoming 1.1608, however, could fuel a surge into 1.1640.