EUR/USD Current Price: 1.1240
- The US ADP Survey showed that the private sector lost 2.76 million jobs in May.
- The European Central Bank will likely expand its stimulus program to support the economy.
- EUR/USD bullish potential intact, but the risk of a bearish corrective movement increased.
Demand for high-yielding assets continued throughout Wednesday, resulting in the EUR/USD pair reaching 1.1251, its highest in almost three months. Upbeat US data boosted equities, which in turn, resulted in sharp losses among safe havens, the greenback included. The US ADP showed that the private sector lost 2.76 million positions in May, much better than the 9 million expected. The economic activity gave signs of improvement, as the ISM Non-Manufacturing PMI hit 45.4 in May, better than the 44 expected. Finally, Factory Orders fell in April by 13%, slightly better than the -14% expected. Also, Markit published the final versions of May Services PMIs for both economies, which were revised marginally higher from preliminary estimates.
This Thursday, the European Central Bank is having a monetary policy meeting. Rates are expected to remain on-hold, with the focus on the PEPP, expected to be expanded by Mrs Lagarde. The market is also anticipating downward revisions to growth and inflation forecasts, all related to the ongoing coronavirus pandemic. The EU will also publish April Retail Sales, seen down by 15% in the month and declining 22.3% when compared to a year earlier. The US will publish employment-related data relevant ahead of Friday’s Nonfarm Payrolls report. Initial Jobless Claims for the week ended May 29 are seen printing 1.8 million.
EUR/USD Short-Term Technical Outlook
The EUR/USD pair has advanced for a seventh consecutive day, which increases the risk of a bearish corrective movement, despite the bullish potential remains firmly in place. In the 4-hour chart, the pair continues to march north above a bullish 20 SMA, which currently stands at around 1.1150. The larger moving averages are gaining bullish strength, although too far away to be relevant. Technical indicators, in the meantime, resumed their advances, supporting another leg higher for the upcoming sessions.
Support levels: 1.1150 1.1110 1.1065
Resistance levels: 1.1195 1.1240 1.1285
See more from Benzinga
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