“¢ Downbeat US ISM PM largely offset robust ADP report and prompts some fresh USD selling.
“¢ The upside now seems capped as investors start positioning for the latest FOMC decision.
The USD selling remained unabated through the early North-American session and lifted the EUR/USD pair to fresh one-week top, around mid-1.1200s post-US ISM PMI.
The US Dollar did get some respite following the release of robust ADP report – showing that the US private sector employers added 275K new jobs in April, though was largely offset by the latest disappointment from US ISM manufacturing PMI.
Meanwhile, a weaker tone around the US Treasury bond yields did little to ease the USD bearish pressure, with the prevalent risk-on mood further driving flows away from the greenback’s perceived safe-haven status and benefitting the shared currency.
It, however, remains to be seen if the pair is able to capitalize on the positive momentum or witness some profit-taking amid some repositioning trade ahead of today’s key event risk – the latest FOMC monetary policy update, due to be announced later during the US trading session.
Technical outlook
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “Technical readings in the 4 hours chart maintain the risk skewed toward the upside, as, despite easing, technical indicators have limited downward strength and hold near overbought levels. The 20 SMA in the mentioned chart keeps advancing below the current level, while the 100 SMA converges with the mentioned Fibonacci resistance.”
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