EUR/USD extends the bounce above 1.2050, US ADP eyed

• DXY faces heavy selling pressure in Europe.
• The 1.2092 Sept High back in sight
• Focus on the US ADP jobs, jobless claims, and services PMI.

After a temporary correction seen a day before, the bulls are back in control on Thursday, now pushing the EUR/USD pair further northwards, in a bid to test the 2017 high of 1.2092.

EUR/USD: FOMC minutes-led USD rally fizzles

Having found strong support just ahead of 1.2000 levels on multiple occasion, the spot is now extending its solid rebound above the midpoint of 1.20 handle, as a generalized USD selling theme returns to the market ahead of the US macro releases. The USD index drops -0.22% to trade near daily lows of 91.67, ignoring the rally seen in Treasury yields.

Moreover, impressive Euro-area services growth numbers reinforced the optimistic outlook on the 19-nation bloc’s economy, further boosting the demand for the Euro against its American rival. Services PMI data showed the euro area was near its best growth in seven years, while services growth in Italy and Spain beat the previous flash estimates.

With the Eurozone data out of the way, “now, market's attention is centered on the upcoming US employment data, starting today with the ADP survey and weekly unemployment claims, ahead of the monthly Nonfarm Payroll report this Friday,” Valeria Bednarik, Chief Analyst at FXStreet, notes.

EUR/USD Technical Levels

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd, writes: “Initial support at 1.2000 holds for the third day, after Wednesday's close in red, keeping immediate focus at the upside, as underlying bull-trend remains intact. However, deeper correction cannot be ruled out as slow stochastic is reversing from overbought territory. Break below 1.2000 handle would expose next strong supports at 1.1961/50 (former top of 27 Nov/Fibo 38.2% of 1.1737/1.2081 up leg, reinforced by rising 10SMA) which is expected to hold extended dips.”