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  • EUR/USD gains further traction and trades closer to 1.19.
  • The sell-off in the dollar picks up pace and drags DXY lower.
  • US ISM Non-Manufacturing coming up next in the calendar.

The selling pressure is gathering traction around the greenback and is helping EUR/USD to clinch fresh weekly tops in the vicinity of 1.19 the figure in the wake of the opening bell in Wall St. on Wednesday.

EUR/USD bid ahead of key US data

EUR/USD accelerates the upbeat momentum and stays at shouting distance from the 2020 tops in the 1.1905/10 band on Wednesday, always on the back of the persistent downtrend in the buck.

The pair gained traction pari passu with the renewed and strong rebound in the sentiment surrounding the risk universe, as investors continue to factor in a positive outcome from the debate between US Republicans and Democrats over a new stimulus package to support the economy amidst the unabated pandemic.

Data wise, the ADP report showed the US private sector added nearly 170K jobs during last month, missing consensus badly. In addition, June’s trade deficit came in a tad above forecasts just above $50 billion.

Next of relevance will be the ISM’s gauge of the US services sector, expected at 55.0 for the month of July. Previously, Markit’s Services PMI came in at 50.0, surprising to the upside.

What to look for around EUR

EUR/USD regained some poise following the corrective downside after reaching +2-year peaks beyond the 1.19 mark at the end of last week. The sharp move up, while largely triggered by broad-based dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally.

EUR/USD levels to watch

At the moment, the pair is gaining 0.79% at 1.1895 and a breakout of 1.1909 (2020 high Jul.31) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the downside, immediate contention emerges at 1.1709 (38.2% Fibo of the 2017-2018 rally) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).