EUR/USD: 100-day MA caps upside despite Powell’s comments, focus on US ADP
- The EUR bulls have a new level to beat in the short-term – the 100-day moving average.
- A bullish close above the 100-day MA ma remain elusive if the US macro data betters estimates forcing markets to scale back expectations of Fed rate cuts.
EUR/USD failed to take out key moving average hurdle on Tuesday despite dovish comments from Federal Reserve’s chief and could fall back to 1.12 if the US jobs data due today betters estimates.
Federal Reserve’s Chairman Powell was out on the wires in the US session on Tuesday stating that the bank would cut rates if the escalating trade tensions begin to have a negative impact on the economy.
Meanwhile, Fed’s Bullard said that a rate cut might be “warranted soon,” and that current interest rates might be “inappropriately high”.
Even so, the EUR/USD pair failed to pierce the 100-day moving average resistance at 1.1277 and closed at 1.1251.
As of writing, the pair is trading at 1.1264. The descending triangle breakout confirmed on Monday is still valid. However, a close above the 100-day MA is needed to strengthen the bullish case.
However, a bullish close above the 100-day MA may remain elusive if the US ADP data, due at 12:15 GMT, and the ISM non-manufacturing data, due at 14:00 GMT, blows past expectations, alleviating fears of deeper economic slowdown in the world’s biggest economy.
The ADP data is expected to show the private sector added 183K jobs in May. Meanwhile, the ISM non-manufacturing index is forecasted to remain unchanged at 55.5 in May.
Ahead of the US ADP data, the pair may take cues from the final German services PMI and Eurozone retail sales figure.
Technical Levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
