EUR/USD clings to gains above 1.24 handle ahead of ADP report

Haresh Menghani FXStreet

• On bids for the fifth consecutive session amid persistent USD weakness.
• The up-move lacked strong conviction ahead of Thursday’s ECB decision.
• US private sector employment details eyed for some trading impetus.

The EUR/USD pair caught some fresh bids over the past hour or so and jumped to fresh session tops, closer to mid-1.2400s.

The pair built on last week's sharp rebound and traded with a positive bias for the fifth consecutive session on Wednesday amid a strong bearish sentiment surrounding the US Dollar. White House economic adviser Gary Cohn's resignation revived fears of a global trade war and triggered a fresh wave of aggressive greenback selling.

Apart from persistent USD selling, the up-move lacked any fundamental trigger and hence, seemed lacking conviction ahead of Thursday's ECB monetary policy decision. Heading into the key event risk, traders are likely to maintain a cautious stance and hence, the bullish momentum runs the risk of fizzling out at higher levels.

On the economic data front, the release of ADP report on the US private sector employment would be looked upon in order to grab some short-term trading opportunities.

Technical levels to watch

Immediate resistance is pegged near the 1.2470 area, above which the bullish momentum could get extended towards reclaiming the key 1.25 psychological mark. On the flip side, the 1.2400 handle now seems to have emerged as immediate support, which if broken might prompt some additional long-unwinding trade and drag the pair back towards the 1.2360-55 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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