EURUSD so far lacks strength for stronger recovery

EURUSD is in recovery mode on Wednesday, as oversold conditions on daily chart prompted a partial profit-taking and much weaker than expected US ADP report added to support.

Daily RSI emerged from oversold territory and 14-d momentum is heading north (although still in negative zone), contributing to positive near-term outlook.

Fresh recovery see break above falling 10DMA (1.0554) as a minimum requirement to generate firmer bullish signal, which will look for confirmation on extension and close above 1.0611/26 pivots (broken Fibo 38.2% of 0.9535/1.1275 / falling 20DMA) to open way for stronger recovery.

Otherwise, the downside would remain vulnerable and risk violation of 1.0405 (50% retracement of 0.9535/1.1275) which would spark fresh acceleration lower.

US NFP report for September is the key event of the week and will be closely watched for fresh signals.

Res: 1.0554; 1.0611; 1.0626; 1.0700
Sup: 1.0448; 1.0405; 1.0305; 1.0200