EUR/USD Mid-Session Technical Analysis for September 1, 2021

The Euro is edging higher against the U.S. Dollar on Wednesday shortly before the release of key U.S. economic reports that could influence Federal Reserve policy later in the month. Meanwhile, economic activity in the Euro Zone picked up, helping to underpin the common currency.

At 11:40 GMT, the EUR/USD is trading 1.1815, up 0.0006 or +0.06%.

The key influences on the EUR/USD today will be ADP’s monthly employment report at 12:15 GMT and Markit’s final manufacturing purchasing managers’ index reading for August at 13:45 GMT and the ISM’s manufacturing PMI for August at 14:00 GMT.

In the Euro Zone, manufacturing growth remained strong in August but supply chain issues caused by the coronavirus pandemic continued to constrain supplies of the raw materials factories need, driving up prices, a survey showed on Wednesday.

The easing of restrictions imposed to stop the coronavirus from spreading has driven demand but many firms have reported logistical troubles, product shortages and a labor crunch.

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) fell to 61.4 in August from July’s 62.8, below an initial 61.5 “flash” estimate.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1845 will signal a resumption of the uptrend. A move through 1.1664 will change the main trend to down.

The minor trend is also up. A trade through 1.1735 will change the minor trend to down. This will also shift momentum to the downside.

The key upside target zone is 1.1820 to 1.1856. Yesterday’s rally into 1.1845 stopped inside this zone.

The short-term range is 1.1664 to 1.1845. Its retracement zone at 1.1755 to 1.1733 is the nearest support area and primary downside target.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.1820.

Bullish Scenario

A sustained move over 1.1820 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 1.1845, followed by 1.1856. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1820 will signal the presence of sellers. If this move generates enough downside momentum then look for a possible acceleration to the downside with the next target area coming in at 1.1755 to 1.1733. Since the main trend is up, buyers are likely to show up on a test of this area.