EUR/USD Suffers as U.S. Dollar Gains Ground Amid Mixed Employment Signals

EUR/USD lost its shine on board-based US dollar buying. It hit an intraday low of 1.02727 and currently trading around 1.03023.

The ADP Non-Farm Employment Change, for December 2024 increased by 122,000, below its November level at 146,000 jobs. It also lags behind the estimated rate of 140,000 new jobs. Its decline signals that U.S. private sector job growth is decelerating. The report released on January 8, 2025, can be the first indication of a softening labor market. ADP processes data on approximately 400,000 businesses, making it quite a significant source of early pointers on employment indicators. This trend may have broader impacts on the U.S. economy.

Technical Analysis of EUR/USD

The pair is holding below short and long-term moving averages in the 4-hour chart. Near-term resistance is seen at 1.0350; a break above this may push the pair to targets of 1.0400/1.0435/1.04635, 1.0500, 1.0550, and 1.0600. Major bullish momentum is likely only if prices can break above 1.0660, where levels of 1.0700, 1.0760, and 1.0800 await. On the downside, support is seen at 1.0270 any violation below will drag the pair to 1.0220/1.01640//1.0100.

Market Indicators and Trading Strategy

Commodity Channel Index (CCI)- bearish

Average Directional Movement Index (ADX) - bearish  

It is good to sell on rallies around 1.0365-68, with a stop-loss at 1.0400 for a target price of 1.0220.