EUR/USD and $1.1050 in the Hands of US ISM PMI and ADP Numbers

It is a busy day ahead for the EUR/USD. German factory orders will draw interest early in the session. Following the trade data from Tuesday, the numbers will need to impress. Economists forecast a 0.3% increase in February.

Later in the session, euro area member states and the Eurozone service and composite PMI numbers will also influence. Spain, Italy, and the Eurozone’s PMI numbers will likely garner the most interest.

Investors should also consider ECB member speeches, with the economic calendar on the busier side. ECB Chief Economist Philip Lane will lecture at the University of Cyprus today.

EUR/USD Price Action

This morning, the EUR/USD was up 0.10% to $1.09617. A mixed start to the day saw the EUR/USD fall to an early low of $1.09470 before making a move.

Technical Indicators

The EUR/USD needs to avoid the $1.0935 pivot to target the First Major Resistance Level (R1) at $1.0988. A move through the Tuesday high of $1.09733 would signal a bullish session. However, the EUR/USD needs hawkish ECB chatter and hotter-than-expected factory orders to support a pre-US session breakout.

In the case of an extended rally, the bulls will likely test the Second Major Resistance Level (R2) at $1.1026 and resistance at $1.1050. The Third Major Resistance Level (R3) sits at $1.1117.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0898 into play. However, barring a data-fueled sell-off, the EUR/USD pair should avoid sub-$1.085 and the Second Major Support Level (S2) at $1.0845. The Third Major Support Level (S3) sits at $1.0754.

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The EUR/USD sits above the 50-day EMA ($1.08560). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1.08560) would support a breakout from R1 ($1.0988) to give the bulls a run at R2 ($1.1026) and $1.1050. However, a fall through S1 ($1.0898) would bring the 50-day EMA ($1.08560) and S2 ($1.0845) into play. A fall through the 50-day EMA would send a bearish signal.

The US Session

Looking ahead to the US session, it is a busy day on the US economic calendar. US ISM Non-Manufacturing PMI and ADP nonfarm employment change will draw interest.

The reports will move the dial, considering the market sensitivity to the JOLTs job openings,

Other stats include trade data and finalized markit survey services PMI numbers, which should have a muted impact on the EUR/USD.

Investors should also monitor Fed chatter on monetary policy and the US economy.