EUR/USD drops to the lower end of daily trading range post-ADP report

   •  ADP report shows US private sector employment increased by 241K.
   •  Focus shifts to the US ISM service PMI for some fresh impetus.

The EUR/USD pair extended its retracement slide from an intraday high level of 1.2315 and dropped to the lower end of its daily trading range post-ADP report.

With investors looking past today's preliminary EZ inflation figures, the pair lost some ground after the latest ADP report showed that the US private sector employers added 241K new jobs during the month of March. The reading surpassed even the most optimistic estimates and was also better than previous month's reading 235K, which provided a minor boost to the greenback.

Today’s US economic docket also features the release of ISM non-manufacturing PMI and would again be looked upon for some fresh trading impetus. The key focus, however, would remain on Friday’s official monthly jobs report (NFP), which might help determine the pair’s next leg of directional move.

Meanwhile, escalating trade war fears among the world’s two-largest economies might continue to cap any meaningful up-move for the buck and should help limit any deeper fall for the major. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “The 4 hours chart shows that the pair has reached a bearish 20 SMA and decelerated, while technical indicators recovered within negative territory, still below previous weekly highs, which were established below their mid-lines. In the same chart, the 100 and 200 SMA are slowly separating, both still around the 1.2340 region, reinforcing the area where the pair topped earlier this week. A break through the level seems unlikely, but if it occurs, the pair will see next intraday resistances coming at 1.2370 and 1.2410. Supports come at 1.2290 and the 1.2250 region, while a clear break below this last could see the decline extending toward the 1.2200/10 price zone.”