EUR/USD Mid-Session Technical Analysis for May 5, 2021

The Euro is trading nearly flat against the U.S. Dollar on Wednesday after recovering from early session weakness. The single-currency is being supported as Euro Zone bond yields edged up as equity markets recovered from a sudden slump a day earlier that had sent yields on the safe-haven assets falling sharply.

At 11:22 GMT, the EUR/USD is trading 1.2014, down 0.0001 or -0.01%.

In other news, Euro Zone producer prices accelerated in line with expectations in March, driven by increases for energy and intermediate goods, data showed on Wednesday, reinforcing forecasts of higher consumer inflation in the coming months.

Later today traders will get the opportunity to react to several U.S. economic reports including April’s ADP Employment Change at 12:30 GMT, the final Markit purchasing managers’ index (PMI) at 13:45 GMT and the ISM Non-Manufacturing PMI at 14:00 GMT.

The results generated by these reports should set the tone later in the session. Stronger-than-expected data could drive yields higher which would make the U.S. Dollar a more attractive investment.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out 1.1994. The next target is the main bottom at 1.1943. A move through 1.2150 will change the main trend to up.

The intermediate range is 1.2243 to 1.1704. The EUR/USD is currently trading inside its retracement zone at 1.1974 to 1.2038.

The main range is 1.1603 to 1.2349. Its retracement zone at 1.1976 to 1.1888 is the key support area. This zone is controlling the near-term direction of the EUR/USD.

The short-term range is 1.1704 to 1.2150. Its 50% level at 1.1927 is another potential downside target. It falls inside the main retracement zone.

A price cluster at 1.1976 to 1.1974 is also potential support.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.2015.

Bearish Scenario

A sustained move under 1.2015 will indicate the presence of sellers. The first downside target is the intraday low at 1.1986, followed by the support cluster at 1.1976 to 1.1974. Aggressive counter-trend buyers could come in on a test of this area.

If 1.1974 fails then look for the selling to possibly extend into the main bottom at 1.1943 and the pivot at 1.1927.

Bullish Scenario

A sustained move over 1.2015 will signal the presence of buyers. The first upside target is 1.2038. Look for sellers on the first test.

Taking out 1.2038 could trigger a surge into a minor pivot at 1.2068.

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.