EUR/USD Holds Near 1.1800 as Fed Rate Cut Bets Grow Following Weak US Jobs Data

Key Points:

• EUR/USD trades steady around 1.1800 in Thursday’s Asian session, marking its second consecutive day of consolidation.
• A softer US Dollar, following weaker-than-expected ADP employment data, supports potential upside for the Euro.
• ECB officials express caution about Euro strength and its implications for inflation.

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Technical Overview – EUR/USD
Current Price: 1.1795

EUR/USD is undergoing a mild pullback after an impressive nine-day rally. While short-term momentum shows signs of cooling, the broader trend remains bullish. The daily Relative Strength Index (RSI) is easing but remains in overbought territory, suggesting limited downside before another potential move higher.

The pair continues to trade well above key moving averages, with the 20-day Simple Moving Average (SMA) offering dynamic support around 1.1570. On the 4-hour chart, EUR/USD is testing the 20-SMA, while the 100 and 200 SMAs slope firmly upward — a sign that buyers remain in control.

Support Levels: 1.1745 · 1.1695 · 1.1640
Resistance Levels: 1.1830 · 1.1880 · 1.1910

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Fundamental Overview

The Euro remains supported amid rising expectations of a US rate cut following a significant miss in the ADP employment report. June private payrolls fell by 33,000 — the first drop in over two years — versus forecasts for a 95,000 gain.

Investors are now eyeing Thursday’s high-impact US data releases, including:

• Nonfarm Payrolls (NFP)
• Average Hourly Earnings
• ISM Services PMI
• S&P Global US PMI

These numbers will be critical in shaping the Fed’s outlook ahead of the July and September policy meetings.

Meanwhile, ECB officials at the latest forum emphasized concerns over the Euro’s strength.

• ECB’s Wunsch noted comfort with current market rate expectations, signaling a “mildly supportive” stance might be appropriate.
• ECB’s Rehn warned of inflation risks staying below target and highlighted how joint European defense borrowing could elevate the Euro’s global role by creating a new safe asset.

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