Yahoo Finance EUR/USD Mid-Session Technical Analysis for June 8, 2020
The Euro is trading lower against the U.S. Dollar on Monday in a likely follow-through move related to Friday’s dramatic reversal to the downside.
After hitting a two-month high on Friday, the Euro broke hard against the U.S. Dollar after a government report showed a surprising recovery in U.S. employment in May after the economy suffered record job losses in April.
The jobless rate also fell to 13.3% last month from a post-World War II high of 14.7% in April, offering hope that the world’s largest economy is starting to stabilize after the pandemic triggered a wave of job cuts.
At 11:51 GMT, the EUR/USD is trading 1.1277, down 0.0011 or -0.10%.
Some of the follow-through selling is related to profit-taking ahead of the Federal Reserve meeting on Wednesday to see how Chairman Jerome Powell views a recent rise in 10-year Treasury yields and a steepening in the yield curve.
In other news, German industrial output posted a record plunge in April as the coronavirus pandemic forced manufacturers in Europe’s largest economy to halt production, with firms expecting a bumpy road ahead despite a massive stimulus package.
Industrial output dropped by 17.9% on the month, figures released by the Statistics Office showed. A Reuters poll had pointed to a slightly smaller fall of 16.0%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to the downside earlier today when sellers took out the previous session’s low following a closing price reversal top on Friday.
A trade through 1.1384 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 1.0871. This is highly unlikely, but there is room for a normal 50% correction.
The main range is 1.1496 to 1.0636. Its retracement zone at 1.1167 to 1.1066 is controlling the longer-term direction of the EUR/USD. It is also a key downside target zone.
The short-term range is 1.0871 to 1.1384. Its 50% level at 1.1127 is another potential downside target. It falls inside the major retracement zone.
Daily Swing Chart Technical Forecast
The confirmation of the closing price reversal top does not change the main trend to down, but it could trigger the start of a 2 to 3 day correction or a short-term break into the series of retracement levels at 1.1167, 1.1127 and 1.1066.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
