EUR/USD: Mildly bid above 1.20 on USD pullback ahead of US ADP, PMI

EUR/USD refreshes intraday high to 1.2026, up 0.10% on a day, while heading into Wednesday’s European open. In doing so, the currency major pair trims the weekly losses, piled more during the previous day, as the US dollar steps back on the market consolidation.

The US dollar index (DXY) eases 0.11% intraday while S&P 500 Futures rise the most in a week while picking up bids near 4,172, up 0.30% so far during the day.

Behind the moves could be the investor’s cautious optimism ahead of the key US data as well as mixed signals from the US Fed and Treasury officials. It should, however, be noted that the coronavirus (COVID-19) updates from Japan and Canada have been grim of late, not to forget India’s sustained run-up in infections. Alternatively, covid vaccine manufacturers have been flashing risk-positive signals and back hopes of faster economic recovery in the West.

Read: Global Covid news updates: Markets looking elsewhere for a catalyst

After Treasury Secretary Janet Yellen’s U-turn the rate hike signals, Fed Minneapolis President Neel Kashkari flaunts over the Fed’s tool to combat higher inflation, if that’s the case in the future.

On Tuesday, market sentiment worsened as downbeat US data and chatters over the global tax deal joined Yellen’s initial support to the Fed rate hike while weighing on the US Treasury yields. However, off in China and Japan, not to forget pre-NFP cautious sentiment, restricted market moves.

Moving on, Eurozone’s quarterly economic forecasts and second readings of April PMIs may offer intermediate EUR/USD moves before pushing traders to pause for the US ADP Employment Change and ISM Services PMI releases for April

Read: US ISM Services PMI April Preview: Inflation readings remain key as recovery gains strength

While upbeat figures for ADP may keep the US dollar pressured, backing EUR/USD in turn, increasing odds of a negative surprise from ISM figures can recall the greenback buyers. Though major attention will be given to Friday’s monthly jobs report from the US and hence any moves before that may be of little importance.

Technical analysis

Although EUR/USD bulls stay hopeful beyond 1.1995-90 support zone, comprising late April low and early March highs, 100-day SMA guards immediate upside around 1.2050.