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EUR/USD surges over 0.40% on Wednesday after economic data in the US reinforced bets that the Federal Reserve would cut rates at the December 9-10 meeting. The pair trades at 1.1668 after bouncing off daily lows of 1.1617.

Euro extends rally as soft US employment data sinks the Dollar, while improving Eurozone PMIs bolster the bullish momentum
 

The Dollar extended its losses as employment data revealed that private companies cut jobs at the fastest pace since 2023, revealed an ADP report. Given the backdrop, money markets priced in a 90% probability of a 25-basis point (bps) rate cut, next week.

Consequently, the EUR/USD’s rally continued, despite that business activity in the services sector in the US expanded in November, according to the Institute for Supply Management (ISM).

In Europe, the European Central Bank (ECB) President Christine Lagarde commented that “indicators of underlying inflation remain consistent with out 2% medium-term target,” adding that the bank expect inflation to stay near its 2% goal “in the coming months.”

Data wise, HCOB Services and Composite PMIs for the Eurozone improved in November. Germany and France’s PMIs expanded as well, while in Spain, the HCOB Services PMI signaled a mild slowdown, expanding at a lower rate compared to October.

EU and US data ahead
 

EUR/USD traders would be eying the release of Retail Sales in Europe, and speeches by ECB policymakers, led by the Vice-President Luis de Guindos. In the US, the schedule will feature November’s Challenger Job Cuts and Initial Jobless Claims for the week ending November 29.

Euro Price This week
 

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.
 

Daily market movers: Euro's boosted by mixed US data
 

• US data barely boosted the Greenback after the ADP National Employment Change showed that private payrolls tumbled -32K in November, missing forecasts for a 10K gain. The data evidenced the deterioration in the US jobs market, reinforcing bets the Federal Reserve will cut interest rates next week.
• The ISM Services PMI in November, surpassed the consensus picking up to 52.6 up from 52.4 beating forecasts of 52.1 revealed an expansion in the sector.
• The Eurozone HCOB Services PMI was updated to 53.6 from 53.1, marking its fourth straight monthly gain and highest level since May 2023.

Technical analysis: EUR/USD clears 1.1650, eyes on 1.1700
 

EUR/USD has remained steady for three consecutive days, but finally broke above 1.1650, opening a new trading range between the latter and the 1.1700 print. Therefore, as buyers gain momentum as depicted by the Relative Strength Index (RSI), a test of the year-to-date (YTD) of 1.1918 seems far towards the year’s end. Still a move to 1.1800 is likely.

On the downside, If EUR/USD falls below 1.1650, its first support is the 50-day SMA At 1.1610, followed by the 20-day SMA at 1.1580, and 1.1500.
 

EUR/USD daily chart

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