EUR/USD Mid-Session Technical Analysis for October 7, 2021

The Euro is inching higher against the U.S. Dollar on below average volume on Thursday with most of the major players on the sidelines ahead of tomorrow’s major U.S. Non-Farm Payrolls report. Flat U.S. Treasury yields and a weaker dollar are influencing the trade at this time.

Despite the subdued price action, the greenback held close to a 14-month high against the single currency as a surge in energy prices fueled worries that inflation could crimp economic growth while also prodding the Federal Reserve to act sooner to normalize policy.

At 12:09 GMT, the EUR/USD is trading 1.1563, up 0.0005 or +0.05%.

Employment is also the main focus for traders and the Federal Reserve, and the closely watched Non-Farm Payrolls report on Friday could provide additional clues to the timing of the Fed’s next policy moves.

Economists expect continued improvement in the labor market, with a consensus forecast for 473,000 jobs to have been added in September, a Reuters poll showed.

On the data front, initial claims and consumer credit are due out on Thursday.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1529 will signal a resumption of the downtrend. A move through 1.1755 will change the main trend to up.

The minor trend is also down. Taking out 1.1640 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 1.1640 to 1.1529. The EUR/USD is currently trading on the weak side of its pivot at 1.1585, making it resistance.

The second minor range is 1.1755 to 1.1529. Its 50% level at 1.1642 is additional resistance.

The strongest resistance is the price cluster at 1.1640-1.1642.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the EUR/USD on Thursday is likely to be determined by trader reaction to 1.1557.

Bearish Scenario

A sustained move under 1.1557 will indicate the presence of sellers. Taking out 1.1529 will indicate the selling pressure is getting stronger. If this is able to generate enough downside momentum then look for a possible acceleration to the downside. The daily chart shows the next major target is the July 16, 2020 main bottom at 1.1371.

Bullish Scenario

A sustained move over 1.1557 will signal the presence of buyers. Overtaking the pivot at 1.1585 will indicate the buying is getting stronger. This could trigger a surge into the resistance cluster at 1.1640-1.1642.

Side Notes

Be careful buying strength or selling weakness because of the well-below average volume. The major players are on the sidelines ahead of Friday’s NFP.