Bulls hold grip after weak US labor data

The Euro keeps firm tone and holding within a narrow consolidation under new two-month high on Wednesday.

The single currency was lifted by weaker than expected US JOLTS job openings data on Tuesday, with today’s release of US ADP report, which showed that hiring in the private sector fell significantly in March (Mar 145K vs 200K f/c and Feb upwardly revised to 261K), adding to signals that US labor market is cooling.

Another key releases, US non-manufacturing PMI (Mar 54.5 f/c vs Feb 55.1), due today and Friday’s key NFP report (Mar 240K f/c vs Feb 311K) are expected to provide more hints about the conditions in two key sectors and generate more direction signals.

The US economy remains vulnerable due to persisting high inflation, while Fed’s strong rate hikes in the past year did not provide expected results and the latest crisis in banking sector, which was so far contained, but sent strong shockwaves through the entire economy.

All these contribute to weaker dollar and keep the single currency underpinned for further advance.

Wednesday’s acceleration resulted in eventual break above the recent range and signaled that bulls are ready to resume after 1.0930/1.0713 pullback and subsequent three-day consolidation (1.0926/1.0788) and attack targets at 1.1000 (psychological) and 1.1032 (Feb 2 peak / 2023 high).

Bullish daily studies support the action, though overbought stochastic signals that bulls may face further headwinds, which would slow the action.

Broken Fibo 76.4% barrier (1.0910) reverted to initial support, ahead of rising 10DMA (1.0861) which should keep the downside protected.

Res: 1.0973; 1.1000; 1.1032; 1.1100
Sup: 1.0930; 1.0910; 1.0861; 1.0835