EUR/USD Mid-Session Technical Analysis for October 6, 2017

The EUR/USD is trading lower shortly before the U.S. opening and ahead of today’s U.S. Non-Farm Payrolls report. The headline number is expected to be skewed because of hurricanes Harvey and Irma. Traders are saying the number may come in as low at 82,000.

The key number to watch is the Average Hourly Earnings. It is expected to show an increase of 0.3%. This number is widely watched by the Fed.

It is possible that a strong report is already priced into the market. Therefore, we could see a two-sided trade. Overall, the EUR/USD is bearish because of rising expectations of a Fed rate hike in December.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1695 earlier today reaffirmed the downtrend. Due to the prolonged move down in terms of price and time, the EUR/USD is in the window of time for a potentially closing price reversal bottom.

A trade through 1.1832 will turn the main trend to up. The next major downside target is 1.1661.

The major retracement zone is 1.1702 to 1.1610. The market is currently trading inside this zone. The bottom at 1.1661 is also sitting inside this zone. Trader reaction to this zone will likely determine the longer-term direction of the EUR/USD.

The new short-term range is 1.1832 to 1.1685. Its retracement zone is 1.1759 to 1.1776. Overtaking this zone will indicate the buying is getting stronger.

The intermediate range is 1.2033 to 1.1685. If the trend changes to up on a move over 1.1832 then its retracement zone at 1.1859 to 1.1900 is the primary upside target.

Daily Forecast

Based on the current price at 1.1710 and the earlier price action, the direction of the EUR/USD is likely to be determined by trader reaction to the major 50% level at 1.1702.

A sustained move under 1.1702 will indicate the presence of sellers. The daily chart is wide open to the downside with potential targets at 1.1661 and 1.1610.

A sustained move over 1.1702 will signal the presence of buyers. The first target is a short-term downtrending angle at 1.1732.

Overtaking 1.1732 could trigger an acceleration to the upside with potential targets 1.1759 to 1.1776 and a major downtrending angle at 1.1793.

The major downtrending angle at 1.1793 is also the trigger point for an acceleration to the upside.