EUR/USD Mid-Session Technical Analysis for October 4, 2021

The Euro is trading higher on Monday as the U.S. Dollar eased when Treasury yields turned lower after giving back earlier gains. Position-squaring and short-covering ahead of Friday’s monthly U.S. Non-Farm Payrolls (NFP) report is also contributing to the single-currency’s strength. A Reuters poll forecast shows the economy added 500,000 jobs last month. A strong report will serve as the catalyst for a November taper by the Fed which could bolster the U.S. Dollar.

At 11:22 GMT, the EUR/USD is trading 1.1628, up 0.0035 or +0.30%.

In economic news, investor morale in the Euro Zone fell for a third month in a row in October and hit its lowest level since April on dimming economic expectations, a survey showed on Monday.

Sentix’s Index for the Euro Zone fell to 16.9 from 19.6 in September. A Reuters poll had pointed to an October reading of 18.6.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1563 will signal a resumption of the downtrend. The main trend will change to up on a trade through 1.1755.

The minor range is 1.1755 to 1.1563. Its 50% level or pivot at 1.1659 is the first upside target. Since the main trend is down, look for sellers on the first test of this level.

The short-term range is 1.1909 to 1.1563. Overtaking the pivot could create the momentum needed to challenge its retracement zone at 1.1736 to 1.1777.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1597.

Bullish Scenario

A sustained move over 1.1597 will indicate the presence of buyers. Regaining the old main bottom at 1.1603 will indicate the short-covering is getting stronger. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the pivot at 1.1659.

Bearish Scenario

A break back under 1.1603 will be the first sign of weakness. Crossing to the weak side of 1.1597 will indicate the selling pressure is getting stronger. If this move continues to generate enough downside momentum then look for the selling to possibly extend into last week’s low at 1.1563. This is a trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.