The EURUSD was lower in the European session after the U.S. dollar continued its recent bounce. Yesterday’s ADP Employment data showed a big miss in expected jobs but the dollar is shrugging that off today.
Private-sector U.S. companies added 428,000 jobs in August, according to the latest ADP report, but analysts had forecast a figure closer to 1 million so it raises fears of a hiring slowdown ahead of the Non Farm Payrolls report on Friday.
Today will see further clarification on the jobs picture in the United States with the release of jobless claims. The market is expecting 950k new jobless claims in the country, alongside a small dip in the 14 million continuing claims. Yesterday’s ADP report could be a warning that analysts were too bullish and a higher jobless claims picture, would almost certainly mean a lower NFP figure tomorrow and this could see the Euro finding some support.
The U.S. dollar is on the third day of a bounce after strong manufacturing data gave the greenback a boost. The world’s reserve currency has been on a very weak path of late, however, and the latest jump higher may simply be a correction before the bigger trend continues.
EURUSD Technical Outlook
EURUSD was 0.5% lower on the day and testing the 1.1800 support level, which coincides with a pennant formation. The Euro can still find support here and 1.2000 would be resistance. On the downside, a break of this level would aim for the stronger uptrend line around 1.1740, which could lead to a deeper pullback if breached. If you want to learn more about technical analysis, Investing Cube has a Trading Course and also runs one-to-one coaching.
EURUSD Daily Chart