- Private sector employment in the U.S. grows by less than expected in June.
- US Dollar Index drops below for the first time since June 26.
- Markit & ISM services PMI data are coming up next.
The EUR/USD pair stretched higher at the beginning of the NA session as the greenback met another selling wave following the disappointing private sector employment figures. After touching its highest level since the last week of June at 1.1720, the pair retreated back to 1.1710, where it was up 0.45% on the day.
The data released by the ADP revealed that the private sector employment increased by 177K from May to June to fall short of the experts’ estimate of 190K. On a positive note, the June figure was revised up to 189K from 178K. The publication highlighted that businesses continued to struggle to find qualified workers, which would suggest a more intense labor shortage in the near-term.
The US Dollar Index, which fluctuated in a narrow band above the 94 mark during the first half of the day, fell to a new 10-day low at 93.91. As of writing, the index was down 0.23% on the day at 93.96.
Later in the session, Markit and the ISM will be both releasing their respective PMI data for the service sector. More importantly, the FOMC is going to publish the minutes of its June 13 meeting.
“It is possible we will see some discussion on the Fed’s balance sheet policy given that interest on excess reserves (IOER) was raised five bps less than the target range for the policy rate. Our economists, however, doubt the Fed is contemplating any imminent changes to the pace of balance sheet roll off at present. We shall find out more soon,” Deutsche Bank analysts note.
Technical levels to consider
The immediate support for the pair aligns at 1.1700 (psychological level) ahead of 1.1640 (20-DMA) and 1.1590 (Jul. 2 low). On the upside, resistances could be seen at 1.1740 (Jun. 4 high), 1.1800 (psychological level), and 1.1850 (Jun. 14 high).
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