- EUR/USD returns to the mid-1.10s following ADP.
- The pair’s upside stalled just ahead of 1.1070.
- US ADP report came in above expectations in August.
The upside impetus in the European currency has now reduced the pace and is dragging EUR/USD back to the 1.1050 region.
EUR/USD gives away gains on US docket
The pair moved to the vicinity of 1.1070 earlier in the session, always in response to the persistent offered tone in the Greenback amidst a firm improvement in the risk-associated universe.
In fact, market participants shifted their focus to the riskier assets after US and Chinese negotiators said trade talks are expected to resume early next month in Washington. In addition, optimism on a Brexit deal has resurfaced in the UK after PM (and Brexiteer) B.Johnson was defeated twice at the House of Commons on Wednesday.
However, spot gave away part of today’s advance after the ADP report showed the US private sector added nearly 200K jobs during August, bettering expectations.
What to look for around EUR
Spot is extending the recovery from 2019 lows near 1.0920 (Monday) amidst somewhat renewed optimism on the US-China trade front and the fresh offered bias surrounding the buck. However, the ongoing up move is seen as corrective only, as recent poor prints from the domestic docket keep the pressure intact on the single currency and strengthened further the need for ECB stimulus, which is likely to be delivered at the bank’s meeting later this month. This view is also expected to keep occasional bullish attempts well contained for the time being. On the political front, Italian effervescence looks dissipated for the time being, while concerns over a Brexit ‘no deal’ scenario look somehow mitigated across the Channel.
EUR/USD levels to watch
At the moment, the pair is gaining 0.18% at 1.1055 and faces the next barrier at 1.1067 (high Sep.5) followed by 1.1090 (21-day SMA) and finally 1.1163 (high Aug.26). On the flip side, a breach of 1.0925 (2019 low Sep.3) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017).
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