1.1000 on sight after solid US ADP report

EUR/USD Current Price: 1.1058

• U.S. private job creation rose more than expected in September, according to ADP.
• The US dollar is benefiting from a risk-adverse environment amid tensions in the Middle East.
• EUR/USD gains short-term bearish traction, looks to test 1.1000.

The EUR/USD pair recovered from a weekly low of 1.1045 announced on Tuesday, with market players maintaining a cautious stance amid macroeconomic data from the United States (US). The focus this week is on US employment figures, with more related numbers scheduled throughout the week before the nonfarm payrolls report is released on Friday.

The country released the JOLTS Job Openings report on Tuesday, which showed job openings unexpectedly rose by 329,000 from 7.711 million in July to 8.040 million in August, providing near-term support for the US dollar. Additionally, the US just released the ADP survey, which showed the private sector added 143,000 in September, better than the 120,000 expected. August’s reading was revised up from 99K to 103K.

Earlier in the day, the eurozone reported that August’s unemployment rate held steady at 6.4%, as expected.

Meanwhile, the USD benefited from a risk-adverse environment amid geopolitical tensions in the Middle East. Crossfires between Israel and Lebanon escalated over the weekend and continue to affect financial markets. Oil prices rose, pushing investors away from high-yielding assets and favoring short-term USD gains.

EUR/USD short-term technical outlook

Technically, EUR/USD is bearish, trading at the lower end of Tuesday’s range. The daily chart shows the pair trading below a simple moving average (SMA) of 20, currently offering dynamic resistance in the 1.1100 price area. Meanwhile, the 100 and 200 SMAs have lost their upside but are holding well below the current. Finally, technical indicators maintain their bearish slope, gaining downward traction below their median lines, which is usually a sign of further losses ahead.

In the short term, according to the 4-hour chart, the risk is to the downside. A strongly bearish 20 SMA is approaching the crossing of the 100 and 200 SMAs with no downward direction, a strong sell signal. Even more, technical indicators are falling after a stage of consolidation within negative levels, anticipating another step south without confirming yet.

Support levels: 1.1040 1.1000 1.0960

Resistance levels: 1.1110 1.1150 1.1200