EUR/USD above weekly lows but unable to hold on top 1.2300

• US Dollar mixed after US economic data. 
• EUR/USD fails to recover ground above 1.2300. 
• Technical outlook shows lack of strength for a bullish run. 

The EUR/USD pair is posting modest gains on Wednesday but remains unable to make a significant recovery. The euro again was rejected from above 1.2300 and trimmed daily gains. 

Price action continued to move sideways despite the recovery of equity prices in Wall Street. The greenback lost strength during the American session but EUR/USD failed to benefit. As of writing was trading slightly below 1.2280, also under the 20-hour moving average. 

No significant impact from data

US economic data released today showed mix numbers. The ADP employment report presented an increase of 241K in private payrolls in March above the 205K expected. The Markit PMI Composite came in at 54.2 above the 54.1 of market consensus but the Services PMI fell unexpectedly to 54.0. Factory Orders in February climbed 1.2%, slightly below estimates (1.7%). The ISM Non-manufacturing fell from 59.5 to 58.8 (vs 59.0 of market consensus). Today’s employment data points to a possible positive surprise on Friday for non-farm payrolls but market participants will likely look more into average earrings. 

Earlier today, preliminary inflation from the Eurozone, came in line with expectations at 1.4% (annual rate) and the Core rate at 1.0%, slightly below the 1.1% estimated. The euro remained steady after the data. 

Technical outlook 

Again EUR/USD was rejected from above 1.2300 signaling lack of strength for a more sustainable recovery. Price remains below the 20-SMA in 4-hour charts and showing weakness despite today’s gains. 

At the moment the 1.2280/85 is offering support, a break lower is likely to add pressure signaling a potential test of the weekly low around 1.2250/55. Below that level, a dynamic support is seen at the uptrend line (from November lows) currently at 1.2225. 

On the upside, the euro needs to recover 1.2300. Above the next relevant level is seen at 1.2330/35 that limited the upside since last Thursday and also the 20-day moving average. If the euro rises on top, the short-term outlook will point to more gains.