EUR/USD bounces sharply to test 1.1700, US ADP, FOMC minutes eyed
|- ECB headlines and dollar weakness continue to underpin the Euro.
- US ADP jobs and FOMC minutes could lift the greenback ahead of looming tariffs deadline.
The common currency appears to have a caught a fresh bid-wave in early Europe, now sending the EUR/USD pair briefly above the 1.17 handle.
EUR/USD: FOMC minutes and Tariffs deadline – key risk events
The spot broke its Asian consolidative mode to the upside and rallied nearly 50-pips last hour, finally conquering the 1.1700 level, as the European traders hit their desks and cheered the Bloomberg report, citing sources that some ECB members see a rate hike at the end of 2019 as 'too late.' The hawkish ECB headlines are helping keep the bullish undertone intact around the Euro heading into the June FOMC meeting.
More so, the looming US-China tariffs deadline continues to weigh negatively on the US dollar trades, knocking-off the US dollar index back below 94.50 levels, down -0.29% on the day.
Looking ahead, amid a lack of fresh fundamentals from the EUR docket, the pair will take cues from the US ADP jobs report ahead of the FOMC minutes. If the FOMC minutes highlights key concerns with regard to a trade war, the US dollar could come under heavy selling pressure while a scope for the upward revision of the neutral rate could trigger a sharp sell-off in the EUR/USD pair.
EUR/USD Technical Levels:
Karen Jones, Analyst at Commerzbank, notes: “EUR/USD faces strong near-term overhead resistance 1.1698/1.1723 and while this holds attention is still on the 1.1510/08 supports (recent lows). Medium to longer term we continue to target the 200-week ma at 1.1394. We would expect this to hold the initial test and provoke some profit taking. Below 1.1394 would introduce scope to the 61.8% retracement at 1.1186. A move above 1.1723 is needed for another shot at the June high at 1.1853/55. Currently, risks are evenly balanced. Above 1.1855 we look for a deeper retracement to the 1.1914 55 week ma.”
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