EUR/USD Forecast: Bulls take control and aim to reconquer 1.0800

EUR/USD Current price: 1.0774

• Upbeat European macroeconomic data helped EUR/USD reach a fresh weekly high.
• A tepid ADP report on private job creation put additional pressure on the US Dollar.
• EUR/USD turned bullish in the near term and could run past 1.0800.

The EUR/USD pair advanced throughout the first half of Wednesday, as demand for the US Dollar fell following comments from Federal Reserve (Fed) Chairman Jerome Powell mid-Tuesday. Speaking at the European Central Bank (ECB) Forum on monetary policy in Sintra, Powell said that the disinflationary trend is giving signs of resuming, although he repeated they need to be more confident before reducing the policy rate.

Meanwhile, the Hamburg Commercial Bank (HCOB) released the final Services and Composite PMIs for the Eurozone for June, upwardly revising the previous estimates. The EU Composite PMI printed at 50.9, yet the official report reads: “The eurozone economy continued to grow at the end of the second quarter, although momentum was lost as the expansion,” as the index was the lowest in three months.

Across the pond, the United States (US) released the ADP report on private job creation. It showed that the sector added 150K new positions in June, below the revised 157K from May and missing the 160K expected. Nela Richardson, ADP chief economist, said: “Job growth has been solid, but not broad-based. Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.” As a result, the US Dollar shed some additional ground, under selling pressure ahead of Wall Street’s opening.

The US also released the June Challenger Job Cuts, which showed US-based employers announced 48,786 cuts in June, down 23.6% from the 63,816 cuts announced in May. Additionally, the May Goods and Services Trade Balance posted a deficit of $75.1 billion, better than anticipated. Finally, Initial Jobless Claims for the week ended June 28 surged to 238K, worse than the 235K anticipated by market players.

S&P Global will later release the June US Services and Composite PMIs, while the country will publish the official ISM Services PMI for the same month. Later in the American afternoon, the Federal Open Market Committee (FOMC) will unveil the Minutes of the latest monetary policy meeting.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows it trades near a fresh weekly high of 1.0777, maintaining the upward pressure. The pair further advanced above a still bearish 20 Simple Moving Average (SMA), providing dynamic support at 1.0742. The 100 and 200 SMAs remain directionless, converging just below the 1.0800 mark and acting as a dynamic resistance. Finally, technical indicators have turned higher but barely cross their midlines into positive territory, still painting a neutral picture.

In the near term, and according to the 4-hour chart, the risk skews to the upside. Technical indicators gain upward traction within positive levels, reflecting increased buying interest. At the same time, a bullish 20 SMA advances above the 100 SMA, both below the current level, also indicating buyers' dominance.

Support levels: 1.0740 1.0700 1.0665

Resistance levels: 1.0810 1.0845 1.0880