EUR/USD remains confined in a tight range below 1.1850 ahead of US data

EUR/USD is extending its downside consolidation mode into the European session, as the dollar holds onto Wednesday’s rebound ahead of a fresh batch of the US macro data.

The main currency pair faced rejection once again at 1.1900 and took a sharp U-turn towards 1.1800 after the greenback spiked on record-high US ISM Services PMI and hawkish comments from Fed Vice-Chair Richard Clarida.

Clarida said that tapering could be brought forward earlier than expected as the labor market recovery is on its way to meet the ‘substantial progress’ benchmark set by the Fed.

Earlier on Wednesday, the spot rallied to test 1.1900, as the US dollar lost ground and reached multi-day lows amid a big miss on the US ADP jobs data.

On the EUR side of the story, growing cases of the Delta covid strain in the Euro area and mixed German Factory Orders data make it difficult for the EUR bulls to attempt a recovery.

Attention now turns towards the Bank of England (BOE) monetary policy announcements, which could have a rub-off effect on the EUR/GBP cross, in turn, impacting the euro.

Markets will also look forward to the US Jobless Claims data and the speech by the Fed official Waller for additional trading impetus.

EUR/USD: Technical levels

“The pair’s further weakness towards 1.1800 becomes imminent but any further weakness will be challenged by 1.1780 and a horizontal area comprising multiple levels since late March, near 1.1760-50. On the flip side, a clear break of 10-DMA level near 1.1845 needs to cross the June 18–21 bottom surrounding 1.1850, as well as mid-July tops close to 1.1880,” FXStreet’s Analyst Anil Panchal explains.

EUR/USD: Additional levels