EUR/USD: Rangebound with Main Trend Up, Momentum Down

The Euro is inching lower against the U.S. Dollar on Friday ahead of a key U.S. jobs report that could help the Federal Reserve decide whether to make an aggressive rate hike of up to 50 basis points at its May monetary policy meeting.

The single-currency is also down sharply from a one-month high reached the previous session. That move is being fueled by a less-optimistic view for a ceasefire in Ukraine.

At 11:01 GMT, the EUR/USD is trading 1.10627, down 0.0004 or -0.04%. On Thursday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $102.59, down $0.84 or -0.81%.

Traders are looking for today’s U.S. Non-Farm Payrolls report, due to be released at 12:30 GMT, to show that nearly 500K U.S. jobs were added in March. The Unemployment Rate is expected to tick lower to 3.7% and Average Hourly Earnings are expected to rise by 0.4%.

A solid jobs report could give the Fed more confidence to keep its aggressive rate-hiking plans in place this year to stifle inflation without fear of slowing the economy too much. This could also trigger an intraday spike to the downside in the EUR/USD.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 1.1185 will reaffirm the uptrend. A move through 1.0945 will change the main trend to down.

The EUR/USD is being controlled by a number of 50% retracement levels. This is responsible for the month-long sideways price action.

On the downside, support is a pair of 50% levels at 1.1019 and 1.0972.

On the upside, resistance is a series of 50% levels ranging from 1.1098 to 1.1249.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to 1.1065.

Bullish Scenario

A sustained move over 1.1065 will indicate the presence of buyers. This could lead to a labored rally with potential resistance at 1.1098 and 1.1151.

Taking out 1.1185 will indicate the buying is getting stronger. This could trigger a further rally into 1.1207 and 1.1249. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1065 will signal the presence of sellers. This could lead to a quick break into 1.1019 and 1.0972.

Taking out 1.0945 will change the main trend to down. This could trigger a further break into the next main bottom at 1.10901.