EUR/USD Technical Analysis: Forms a rectangle - bearish continuation pattern on 1-hourly chart ahead of ADP

   •  The pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band, forming a rectangle on the 1-hourly chart ahead of ADP report.

   •  Given the recent failures to sustain/build on the momentum beyond the 1.1400 handle, the pair's inability to register any meaningful recovery clearly points to persistent selling bias.

   •  Meanwhile, bearish technical indicators on hourly/daily charts add credence to the bearish set-up, which will be reaffirmed on a break through the rectangle support near the 1.1290 region.

   •  On a sustained weakness below the mentioned support, the pair is likely to accelerate the fall towards 1.1260-50 intermediate support before challenging multi-month lows, around the 1.1215 area.

   •  Alternatively, a weaker ADP report might prompt some short-covering bounce and a subsequent move beyond 50-hour SMA, around the 1.1320-25 region, might negate the near-term bearish outlook.

EUR/USD 1-hourly chart