The EURUSD pair, currently trading at 1.10119, has garnered interest from buyers, causing it to reverse its first daily decline in three days. This is due to a general weakening of the US Dollar across the market.

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• EUR/USD picks up bids to reverse the first daily loss in three amid broad US Dollar pullback.

The pair currently trades last at 1.10119.

The previous day high was 1.1046 while the previous day low was 1.0994. The daily 38.2% Fib levels comes at 1.1014, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1026, expected to provide resistance.

EUR/USD justifies the surprise US credit rating cut but rising to 1.1010 during the early hours of Wednesday’s Asian session. In doing so, the Euro pair reverses the previous day’s losses, the first in three, ahead of the key United States Automatic Data Processing (ADP) Change Employment, the early signal for Friday’s Nonfarm Payrolls (NFP).

Late on Tuesday, Fitch Ratings downgraded the US government’s credit rating to AA+ from AAA while terming fears of the debt crisis as the key catalysts for the stark move. Following the announcements, the White House and US Treasury Secretary Janet Yellen rushed to criticize the move and defend the US Dollar but failed of late.

Also read: Fitch downgrades US government’s AAA credit rating to AA+, US Dollar retreats

Apart from that, downbeat comments from Atlanta Federal Reserve Bank President Raphael Bostic also underpin the EUR/USD pair’s recovery. That said, Fed’s Bostic rules out the need for a September rate hike while warning of the risk of over-tightening.

Even so, the mostly upbeat US data and unimpressive statistics from the bloc, as well as the aftershocks of the European Central Bank’s (ECB) dovish hike, keeps the EUR/USD buyers in check.

On Tuesday, US ISM Manufacturing PMI for July improves to 46.4 from 46.0 prior, versus 46.8 expected. Further details unveil that ISM Manufacturing Employment Index slumped to 44.4 from 48.0 expected and 48.1 prior whereas the ISM Manufacturing Price Paid for the said month rose to 42.6 from 41.8, compared to 42.8 market forecasts. Elsewhere, the US JOLT Job Openings for June also eased to 9.582M compared to 9.62M expected and 9.616M previous readings (revised).

At home, German Unemployment Rate eased to 5.6% for June versus 5.7% expected and prior whereas the final prints of HCOB Manufacturing PMI for July confirmed 38.8 figure. On the same line, the last readings of Eurozone HCOB Manufacturing also matched initial forecasts of 42.7.

Amid these plays, Wall Street closed mixed and the US Treasury bond yields rose but the S&P500 Futures drop 0.34% intraday by the press time.

Moving on, the market’s reaction to the US rating cut and cautious mood ahead of the US ADP Employment Change may restrict EUR/USD moves amid a light calendar in the old continent. That said, the ADP data can prod the US Dollar bulls if matching or decline below the downbeat forecasts of 189K for July versus 497K prior.

Also read: ADP Jobs Preview: Will a softer report slow down the US Dollar?

EUR/USD pair’s recent recovery could be linked to the repeated failure to break a two-month-old rising support line, close to 1.0980 by the press time. The rebound, however, remains elusive unless crossing the 1.1050 resistance.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.101 at the time of writing. Pair opened at 1.0997 and is trading with a change of 0.12% % .

The pair is trading below its 20 Daily moving average @ 1.1065, above its 50 Daily moving average @ 1.0918 , above its 100 Daily moving average @ 1.0907 and above its 200 Daily moving average @ 1.0725

The previous day high was 1.1046 while the previous day low was 1.0994. The daily 38.2% Fib levels comes at 1.1014, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1026, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0978, 1.096, 1.0926
• Pivot resistance is noted at 1.1031, 1.1065, 1.1083

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