EUR/USD sticks to modest gains, around 1.2030 level

Haresh Menghani FXStreet

• USD struggles to build on yesterday’s recovery move.
• A goodish pickup in US bond yields capping additional gains.
• Focus shifts to US ADP report for fresh trading impetus.

The EUR/USD pair extended its steady recovery move from the key 1.2000 psychological mark but lacked any strong follow-through momentum.

Overnight US Dollar recovery move, supported by upbeat ISM manufacturing PMI and perceived hawkish FOMC meeting minutes, now seemed losing steam and remained supportive of the pair's modest uptick on Thursday.

However, a goodish pickup in the US Treasury bond yields, which although failed to revive the USD demand, was seen keeping a lid on any meaningful up-move for the pair. Adding to this, the prevailing bullish sentiment in equity markets was also seen denting the Euro's funding currency status and further collaborated towards capping gains.

On the economic data front, the release of final Euro-zone services PMI prints, expected to match flash estimates, are likely to pass unnoticed and traders are likely to take cues from the release of the ADP report on the US private sector employment.

Technical levels to watch

Any subsequent up-move is likely to confront immediate resistance near the 1.2055-60 region and is closely followed by 1.2080-90 supply zone. On the flip side, bulls would continue to defend the 1.20 handle, which if broken might trigger a corrective slide back towards 1.1950-45 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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