EUR/USD bounces back to the 1.0550 area

The euro managed to trim losses against the US dollar and climbed back to the level it had before the ADP employment data. EUR/USD fell to 1.0533 after the report but then rose back to 1.0560. 

The pair remained steady during the last hours, hovering around 1.0550, marginally lower for the day. 

The US dollar was rising in the market and after the ADP February private payroll report (that surpass expectations significantly), it rose further in the market while US bond yields continued to climb. In Wall Street, the Dow Jones was falling 0.03% while the Nasdaq was up 0.44%. European markets finished modestly higher, the day before the European Central Bank (ECB) meeting. Most analysts expect no change from the central bank tomorrow. 

In the US, after today’s data, attention now turns to Friday’s NFP and also into next week FOMC meeting. 

Technical levels

The recent recovery was capped by the 20-hour moving average that stands around 1.0560 and is immediate resistance; a break higher is likely to lead to a test of daily highs located at 1.0573. The next resistance area could be seen at 1.0600 and 1.0630 (Feb 28 high). 

To the downside, the pair found support above 1.0530 that protects the key short-term support located between 1.0490 and 1.0500; a consolidation below the mentioned zone could open the doors for an extension of the decline, with a potential test of 2017 lows.