- EUR / USD drew some buying on the dips on Wednesday amid dovish USD price action.
- The USD remained on the defensive after the disappointing release of the US ADP report.
- Employment in the private sector increased by 330,000 in July from 695,000 expected and 680,000 previously.
The pair EUR/USD It reversed an initial slide to below 1.1850, or multi-day lows, and moved to the upper end of its intraday trading range after the US ADP report, although it lacked follow-up.
The pair witnessed some selling in reaction to the downward revision of the Eurozone services PMIs for July, but managed to attract some buying amid dovish action in the price of the US dollar. Reassuring market expectations that the Fed will maintain its ultra-losing policy stance for a longer period continued to act as a headwind for the dollar. This, in turn, was seen as a key factor that extended some support to the EUR / USD pair.
USD bulls remained on the defensive following the disappointing release of the US ADP report, which showed private sector employers added 330,000 new jobs in July. This was well below the consensus estimates of 695,000 and June’s revised downward reading of 680,000 (692,000 previously reported). The data added to concerns about the potential economic consequences of the fast-spreading Delta variant of the coronavirus and weighed on the dollar.
That said, the cautious mood prevailing in the equity markets could extend some support to the dollar’s relative safe-haven status and capitalization gains for the EUR / USD pair. Investors could also be reluctant to place aggressive bullish bets ahead of Friday’s release of the closely watched US monthly jobs report. So it will be wise to wait for some solid follow-up buying before positioning yourself for any further appreciation moves.
Technical levels
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