EUR/USD drops to session low after upbeat ADP report

The EUR/USD pair ran through fresh offers and touched a fresh session low near 1.0770 region after upbeat ADP report on US private sector employment. 

According to the ADP report, the US private sector employers added 246K new jobs in January, surpassing even the most optimistic estimates and far-than 153K jobs in December. The ADP report is seen as a precursor to the official jobs report (NFP) due on Friday and hence, today’s stronger details provided the much needed respite for the US Dollar bulls. 

Despite of today's mild retracement, the pair reversed only few pips from yesterday's strong gains as investorskeenly await for the Fed monetary policy decision before confirming a firm near-term direction for pair. In the meantime, the US ISM manufacturing PMI might also short-term trading opportunities during early NY session.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "Technically the pair is near a major resistance area, the 1.0800/40 region, where the pair bottomed for most of 2015 and 2016, while in between, at 1.0820, the pair has the 50% retracement of the November/January decline. A dovish, uncertain FED, could push the pair through the region, with a daily close above it favoring an extension up to 1.0930, the next Fibonacci resistance."

She further writes, "Below 1.0770, the risk turns towards the downside, but the first line of buyers waits around 1.0710. Only below this last the risk will turn towards the downside, with 1.0650/60 being the next support area."