This is not a good choice of printer for those labels as I see the print path makes a U turn and this is where the labels peel off inside the printer.
As to face up or down, that's EASY to figure out. I take a sheet of paper and put an X on it and place that in the tray for a print test. Then I look at where the X ended up and think over how it works. Then I know if it is face up or down for that printer.
But this is not a model I would put Avery labels into. Full sheet label would be fine but those pre-cut sheets look to be a bad idea.
I need to print avery labels: how should the labels be loaded - face up or face down? When I called epson support they told me they do not support printing avery labels - only their own paper, which you must then cut each label. I can't believe this to be true - I need to print many different sizes of labels. This was a breeze with my previous HP printer.