The Euro is trading higher against the U.S. Dollar despite a report showing U.S. weekly jobless claims came in slightly better than expected. The data was released a day after ADP reported much-lower-than-expected private sector hirings and a day before the key August jobs report that could determine when the Federal Reserve begins tapering its massive stimulus.
At 14:43 GMT, the EUR/USD is trading 1.1865, up 0.0026 or +0.22%.
First-time claims for unemployment insurance totaled 340,000 for the week ended August 28, versus a Dow Jones expectation of 345,000. The number is also the lowest since March 2020 at the beginning of the COVID crisis.
Friday’s U.S. August Non-Farm Payrolls report is expected to show the economy added 720,000 jobs during the month, down from 943,000 jobs added in July.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous day’s high at 1.1857.
A trade through 1.1664 will change the main trend to down. This is highly unlikely, however, since the EUR/USD is up nine sessions from its last main bottom on August 20, it’s on the radar for a possible closing price reversal top.
The minor trend is also up. A trade through 1.1794 will change the minor trend to down. This will shift momentum to the downside.
The main range is 1.1975 to 1.1664. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1856 to 1.1820, making it new support.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to the main Fibonacci level at 1.1856.
A sustained move over 1.1856 will indicate the presence of buyers. If this move continues to generate enough upside momentum then look for an eventual test of the main top at 1.1909.
A sustained move under 1.1856 will signal the presence of sellers. Taking out 1.1839 will turn the EUR/USD lower for the session. This will put the Forex pair in a position to post a potentially bearish closing price reversal top.
This won’t change the main trend to down, but if confirmed, it could trigger the start of a 2 to 3 day correction.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire