EUR/USD: consolidates supply and dollar strength post strong ADP report

Currently, EUR/USD is trading at 1.0550, down -0.19% on the day, having posted a daily high at 1.0575 and low at 1.0535.

EUR/USD was under pressure today and the price dropped below the 1.0560 support line established on yesterday's supply from 1.0640 highs. The euro has been in a range of 150 pips so far for the month of March while markets assess the possibility of a March hike from the Fed. Today's ADP survey added 298,000 new jobs during February and this drove demand for the dollar as investors are expecting a strong Nonfarm Payroll report this Friday. 

Just a reason or two to short the 'March rate hike herd'

For the meantime, markets now turn towards the ECB monetary policy meeting for this Thursday. While markets fully expect the ECB to keep the bond buying program and rates unchanged, they will be paying close attention to Draghi's rhetoric and clues for when we might expect changes to policy with respect to the 2% inflation target being achieved. 

EU is now growing faster than the U.S. - Donald Tusk

EUR/USD levels

Valeria Bednarik, chief analysts at FXStreet explained that from a technical point of view, the risk is clearly towards the downside:

"In the 4 hours chart the price stands comfortably below 1.0565, a major Fibonacci resistance, while the 20 SMA has lost its bullish strength, now turning lower and converging with the 100 SMA in the 1.0590 region.  Also, the Momentum indicator in the mentioned chart turned flat within a negative territory, whilst the RSI indicator continues heading lower, reaching fresh 2-week lows at 40."