EUR/USD Mid-Session Technical Analysis for October 2, 2019

Based on the early price action and the current price at 1.0934, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s high at 1.0943.
James Hyerczyk

The Euro is trading flat to higher against the U.S. Dollar on Wednesday, shortly after the U.S. opening and before the release of the ADP Non-Farm Employment Change at 12:15 GMT. This report is likely to set the tone for the session following yesterday’s weaker-than-expected ISM US Manufacturing PMI report that fueled a dramatic reversal to the upside by the single-currency.

At 11:25 GMT, the EUR/USD is trading 1.0934, up 0.0001 or +0.01%.

The ADP report is expected to show the private sector added 140K jobs in September. A weaker-than-expected report is likely to drive up the chances of a Fed rate cut at the end of October and this should be bearish for the U.S. Dollar. After the release of yesterday’s manufacturing report, the odds of a rate cut jumped from 40% to 60%.


Daily Technical Analysis

The main trend is down according to the daily swing chart, however, yesterday’s closing price reversal bottom indicates momentum may be getting ready to shift to the upside.

A trade through 1.0943 will confirm the chart pattern. This won’t change the trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally. A move through 1.0879 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The new range is 1.1110 to 1.0879. If the closing price reversal bottom is confirmed then look for a potential rally into its retracement zone at 1.0995 to 1.1022.

Daily Technical Forecast

Based on the early price action and the current price at 1.0934, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s high at 1.0943.

Bullish Scenario

A sustained move over 1.0943 will indicate the return of buyers. Not only will this confirm the reversal bottom, but it could also generate enough upside momentum to challenge the downtrending Gann angle at 1.0980. Since the main trend is down, sellers are likely to come in on a test of this angle.

Taking out 1.0980 will indicate the buying is getting stronger. This could trigger a further rally into the 50% level at 1.0995, followed by a Fibonacci level at 1.1022.

Bearish Scenario

A sustained move under 1.0943 will signal the presence of sellers. This could lead to a retest of yesterday’s low at 1.0879. If this closing price reversal bottom fails as support then look for a potential spike to the downside with the May 11, 2017 main bottom at 1.0838 the next likely downside target.

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