The EUR/USD exchange rate jumped 1.22% to an intra-day high of 1.1286 dollars per euro on Wednesday, after European Central Bank (ECB) President Mario Draghi said at their conference that the Eurosystem staff macroeconomic projections foresee annual Harmonised Indices of Consumer Prices (HICP) inflation at 0.3% in 2015, 1.5% in 2016 and 1.8% in 2017. In comparison with the last forecast in March, the inflation projections have been revised upwards for 2015 and remain unchanged for 2016 and 2017. HICP is the consumer price inflation measured in the eurozone.

Mr. Draghi declined to comment on ongoing negotiations between the Greek government and its creditors as Greek Prime Minister Alexis Tsipras is meeting with European Commission President Jean-Claude Juncker. Greece is facing a 300 million euro payment due to the International Monetary Fund on Friday. On Tuesday, the EUR/USD surged 2.45% to an intra-day high of 1.1191 dollars per euro after Mr. Tsipras said that he has a “realistic” debt deal proposal.

Payroll processor ADP said on Wednesday that businesses added 201,000 jobs in May, up from just 165,000 in the previous month, in line with expectations. The report is a measure of non-farm private sector employment of about 400,000 U.S. businesses which are clients of ADP. The U.S. dollar index (DXY), a weighted geometric index of the value of the U.S. dollar relative to a basket of six major currencies, dipped 0.7% to an intra-day low of 95.21, below 96.27, or the 50% Fibonacci retracement level.

On Friday, the Bureau of Labor Statistics (BLS), the U.S. Department of Labor, will release its official jobs report for May. Economists forecast it will show that employers added 227,000 jobs, and the unemployment rate remained 5.4 percent.

As of May 26, there are 242,686 short positions of euro FX (CME:6E), traded on the Chicago Mercantile Exchange (CME), by asset manager/institutional and leveraged funds. This is compared to about 82,191 long positions, according to the Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) each Friday. Hedge funds may be staying on the sidelines as there was only a net increase of about 65 contracts in short positions from last week, where euro FX contracts are traded in units of 125,000 euros.

From our technical viewpoint, the EUR/USD bounced off the short-term trendline support of the symmetrical triangle at 1.09 dollars per euro. The EUR/USD could break out the symmetrical triangle at 1.13 dollars per euro and the technical head resistance of 1.14 dollars per euro by Friday, if the U.S. jobs report comes in below consensus expectations. The projected conservative target for a breakout event is 1.23 dollars per euro, determined by adding the width at the top of the pattern to the point of breakout.

Since Mr. Draghi wants Greece to remain in the eurozone, we expect that the Greek debt negotiations will yield a positive outcome, despite tough talk from both sides. Nonetheless, a negative outcome could trigger a massive euro selloff.