EUR/USD Mid-Session Technical Analysis for September 3, 2021

The Euro is trading higher against the U.S. Dollar on Friday as investors digested a disappointing U.S. August jobs report. The big miss in the headline number of the report likely means the Fed will pass on a September 21-22 tapering announcement.

At 13:17 GMT, the EUR/USD is trading 1.1899, up 0.0023 or +0.19%.

The economy added only 235,000 positions, the Labor Department reported Friday. Economists surveyed by Dow Jones had been looking for 720,000 new hires. The unemployment rate dropped to 5.2% from 5.4%, in line with expectations. Growth in average hourly earnings continues to come in strong with a 0.6% rise month over month, the employment report showed.

Despite the headline miss, U.S. Treasury yields are trading higher. This is likely because of the jump in average hourly earnings and the drop in the unemployment rate. This move could be capping gains in the Euro.

Nonetheless, the single currency is still being supported by regional inflation at a decade high and hawkish rhetoric from European Central Bank officials ahead of a policy meeting on September 9.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1909 will reaffirm the uptrend.

A move through 1.1664 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the EUR/USD is inside the window of time to post a potentially bearish closing price reversal top.

On the upside, the next resistance is a major 50% level at 1.1941. On the downside, the nearest support is a retracement zone at 1.1856 to 1.1820.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1876.

Bullish Scenario

A sustained move over 1.1876 will indicate the presence of buyers. The first target is 1.1909. Taking out this level will mean the buying is getting stronger. This could trigger an acceleration to the upside with 1.1941 the next likely target price.

Bearish Scenario

A sustained move under 1.1876 will signal the presence of sellers. The first downside target is 1.1856. Buyers could come in on the first test of this level. If it fails, the selling could possibly extend into 1.1820.

Side Notes

Closing below 1.1876 will form a closing price reversal top. This won’t change the trend, but if confirmed, it could lead to the start of a 2 to 3 day correction.