The EUR/USD currency pair is currently trading just under the 1.0350 level following a downturn that led to a negative close on Tuesday. Market participants are observing a tentative atmosphere among buyers as attention shifts to upcoming US employment data and the release of the FOMC meeting minutes.
After experiencing an increase on Monday, the EUR/USD pair demonstrated a notable reversal on Tuesday, settling in a quiet range below the 1.0350 level as the European trading session commenced on Wednesday. The US Dollar garnered strength from a shift in investor risk sentiment, alongside robust economic data released on Tuesday that pressured the EUR/USD lower.
Recent macroeconomic indicators have revealed improvements in the U.S. services sector, with the ISM Services PMI rising to 54.1 in December, an uptick from 52.1 in November. Additionally, the JOLTS Job Openings report indicated a rise to 8.09 million in November, up from 7.84 million in October, both figures surpassing analysts’ forecasts.
On Wednesday, investors are keenly awaiting the release of the ADP Employment Change data, which is anticipated to show an increase of 140,000 private sector jobs in December, following an increase of 146,000 in the previous month. A figure exceeding 150,000 could bolster the USD, while a number falling below 130,000 may negatively impact the currency’s value.
Later in the day, the Federal Reserve’s minutes from its December policy meeting are set to be published. Unless the report contains unexpectedly dovish remarks, the USD is expected to maintain its strength against its counterparts.
From a technical standpoint, the Relative Strength Index (RSI) on the 4-hour chart has dipped below the neutral 50 mark, indicating a cautious stance among buyers. The EUR/USD has also closed the last three 4-hour candles beneath both the 20-period and 50-period Simple Moving Averages (SMA).
Key support levels lie at 1.0320, coinciding with the Fibonacci 23.6% retracement of the recent downtrend, followed by 1.0300 and 1.0240. On the upside, potential resistance levels include 1.0370, 1.0400, and 1.0420, which are aligned with key Fibonacci retracement levels and moving averages.
