EUR/USD declines below the 20-day SMA and threatens the 100-day SMA

The EUR/USD is trading in negative territory after 3 consecutive days of losses, fueled by a stronger USD following robust labour market data. The greenback, measured by the DXY index, gained ground in the middle of the week and jumped to its highest label since July 7.

According to, Automatic Data Processing (ADP), Inc released the US Employment Change for July, which measures the change in the number of employed people in the US, came in at 324k, better than the expected 189k but below the previous 455k. With this in mind, hot labour market data may set the tone for the Federal Reserve (Fed) to consider one additional hike in 2023, and that is what is driving the USD upwards. 

That being said, Jobless Claims on Thursday and the Nonfarm Payrolls report on Friday will give additional clues to the markets regarding the labour situation in the US and will continue placing their bets for the next Fed meeting. As for now, according to the CME FedWatch tool, the most likely case is that the Federal Open Market Committee (FOMC) won't hike in September or November.
 
For the Eurozone’s side, Spain released the Unemployment Change for July, which showed that the number of unemployed workers added during the previous month, came in better than expected. This comes after Germany also reported strong labour figures on Tuesday. Its worth noting that Christine Lagarde highlighted that the labour market remains robust and also mentioned that incoming data will be considered for the following interest rate decisions, so strong data may fuel hawkish bets on the European Central Bank (ECB). For the rest of the week, Services PMIs from European countries will be released on Thursday, giving further guidance to both markets and the ECB regarding the economic activity situation in the zone.

EUR/USD Levels to watch

According to the daily chart, bears are gaining ground as the Relative Strength Index (RSI) is in negative territory and has a slope below its midline. The Moving Average Convergence Divergence (MACD) prints strong growing red bars indicating that bulls are not in the scene.

Resistance levels: 1.0950, 1.1000, 1.1075 (20-day SMA).
Support levels: 1.0913 (100-day SMA), 1.0900, 1.0850.

EUR/USD Daily chart