EUR/USD fades the spike to 1.1880, back near 1.1830

After recording fresh cycle highs near 1.1880 earlier in the session, EUR/USD met sellers and is now heading back towards the 1.1830 area.

EUR/USD now focused on ADP

Spot has surrendered part of the initial daily gains although it remains well into the positive territory on Wednesday, always amidst a renewed selling bias around the greenback.

In fact, tracked by the US Dollar Index, the buck lost traction following yesterday’s bullish attempt to the boundaries of the key up barrier at 93.00 the figure, as US political uncertainty coupled with rising scepticism over the ability of the Federal Reserve to deliver a third rate hike later in the year keeps undermining any sustainable recovery in the greenback.

In the meantime, EUR stays well underpinned by narrower yield differentials between German and US money markets, while speculations on the ECB ‘tapering’ at some point in the next months (September most likely) also adding to the upbeat sentiment.

In the US data space, the ADP report is seen coming in at 185K for the month of July, while speeches by Cleveland Fed L.Mester (2018 voter, hawkish) and San Francisco Fed J.Williams (2018 voter, dovish) should also keep the attention on the buck.

EUR/USD levels to watch

At the moment, the pair is advancing 0.25% at 1.1831 facing the next hurdle at 1.1868 (2017 high Aug.2) seconded by 1.2040 (2012 low Jul.24) and then 1.2166 (50% Fibo of the 2014-2017 drop). On the other hand, a breakdown of 1.1735 (38.2% Fibo of the 2014-2017 drop) would target 1.1691 (10-day sma) en route to 1.1611 (high Jul.26).