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  • EUR/USD is posting modest daily losses on Wednesday.
  • US Dollar Index is struggling to extend its rally.
  • Private sector employment in US rose more than expected in January.

The EUR/USD pair spend the first half of the day in a relatively tight range around 1.2050 but came under renewed bearish pressure ahead of the American session. At the moment, the pair is consolidating its daily losses at 1.2022, losing 0.16% on a daily basis.

EUR struggles to find demand since the start of the week

Earlier in the day, the data published by the Eurostat showed that the Core Consumer Price Index in January jumped to 1.4% from 0.2% and came in higher than the market expectation of 0.9%. Nevertheless, this report had little to no impact on the shared currency’s performance against its rivals and USD’s market valuation continued to drive EUR/USD movements.

The US Dollar Index (DXY) extended its rally and touched its highest level in two months at 91.30 during the European trading hours but lost its momentum. 

The data from the US revealed that the ISM Services PMI jumped to its highest level in two years at 58.7 in January and beat the market expectation of 56.8. Additionally, the Automatic Data Processing (ADP) Research Institue reported that the private sector employment in the US increased by 174,000, compared to analysts’ estimate of 49,000.

Following the upbeat data releases, the DXY lost its traction and was last seen losing 0.06% on the day at 91.14, allowing EUR/USD to limit its losses.

On Thursday, Retails Sales data from the eurozone will be looked upon for fresh impetus ahead of the US Department of Labor’s weekly Initial Jobless Claims report.

Technical levels to watch for