Weaker ADP, weaken the USD
The US ADP report came in much weaker than expected at 330K vs 695K estimate. That level of weakness is hard to ignore. The initial reaction has been a move lower in the US dollar.
For the EURUSD, the price has now retraced the declines from the earlier London session high. The London morning session high reach 1.18792. The subsequent fall took the price below a swing area between 1.18467 and 1.18507. It also cracked below the 38.2% retracement of the range since July 20 at 1.18482. What did not happen is the pair could not get to and through the 200 hour moving average at 1.18392 (see green line in the chart above).
That support hold, led to a rotation back to the upside as the sellers turned buyers. The ADP report has hastened that move to the upside..
The price just printed a new session high 1.18863. That also moved the price back above its 100 hour moving average of 1.18747. Traders would want to see the price remain above that 100 hour moving average for the most bullish bias now.
The next target area comes between 1.18928 and 1.18965. That is home to swing highs going back to last week (see red numbered circles). Above that is the high from July at 1.19081. Get above that level opens the door for further upside momentum.
