EUR/USD retreats to 1.0900 despite weaker-than-expected US data
- US Dollar gains momentum during the American session.
- US data points to a slowdown in activity, hiring and also, inflation.
- EUR/USD down for the day, moves away from two-month highs.
The EUR/USD corrected to the 1.0900 zone after the beginning of the American session and despite weaker-than-expected US economic data. The US Dollar gained momentum, pushing the pair to the downside.
DXY holds to gains after US data
Automatic Data Processing (ADP) released its employment report showing that in March the private sector added 145K jobs, below expectations of 200K. The US Dollar dropped after the report but later, following the ISM Service, PMI turned decisively higher for the day.
The ISM Service PMI came in at 51.2 in March, a bigger-than-expected slowdown from the 55.1 of February, and below market expectations of 54.5. The Employment Index fell to 51.3 from 54 and the Price Paid fell from 65.6 to 59.5. The report shows activity expanding at a modest pace with inflation indicators retreating further.
Despite the fact that the economic figures offer arguments for the monetary policy doves the US Dollar gained momentum, even as US yields printed fresh lows.
The EUR/USD is hovering around 1.0920. The slide from the 1.0970 area is seen as a correction so far. Below 1.0900, the next support stands at 1.0870. On the upside, if the Euro retakes 1.0950, it could likely rise to test the 1.0970 zone again.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
