The Euro traded marginally higher against the US Dollar on Wednesday, with EUR/USD hovering around 1.1536 during the European session, supported by firm market expectations of a further European Central Bank interest rate hike in September and a softer greenback ahead of key US employment figures. According to analysis published by FXStreet, the US Dollar came under modest pressure as traders positioned themselves ahead of the ADP Employment Change report for July, scheduled for release at 12:15 GMT. Market consensus estimates pointed to US private employers adding 70,000 new workers during the month, a figure meaningfully below the 98,000 jobs recorded in June.
Given that Federal Reserve officials have ceased providing formal forward guidance on monetary policy, the private sector employment reading is expected to carry considerable weight in shaping near-term rate expectations. On the European side, hawkish ECB bets continued to provide a constructive backdrop for the single currency. TD Securities noted that market pricing remains fully aligned with expectations of a 25 basis point ECB rate hike in September, describing this outcome as the bank's own base case.
The institution observed no material shift in expectations ahead of the upcoming policy meeting, underlining the persistence of a hawkish bias across Eurozone rate markets. ECB Governing Council member Martin Kocher, whose remarks were released last week, adopted a data-dependent tone while reaffirming the central bank's commitment to returning Euro area inflation to its 2% target on a sustainable basis. Kocher's comments also highlighted the potential for geopolitical developments to rapidly alter energy prices and, by extension, the inflation outlook, flagging lingering upside risks to Eurozone prices.
According to FXStreet's FXS Speechtracker, Kocher's remarks scored 5.6 out of 10, below the historical average of 6.3 out of 10, indicating a somewhat less assertive tone than typical ECB communications. Analysts noted that the combination of acknowledged inflation risks and a conditional commitment to the 2% objective suggests limited immediate policy aggression but keeps the door open to renewed tightening rhetoric should energy-driven price pressures intensify heading into autumn. From a technical standpoint, EUR/USD was trading around 1.1537, holding above the 20-period Exponential Moving Average at 1.1461, a configuration that analysts described as keeping the near-term bias constructive.
The 14-period Relative Strength Index stood at 62, indicating positive momentum without entering overbought territory, suggesting that buyers retain control as long as the pair holds above the short-term moving average. Immediate resistance was identified at 1.1544, corresponding to a downward resistance trend line breakout level. A sustained daily close above this threshold would be seen as strengthening the bullish outlook.
On the downside, the 20-period EMA at 1.1461 represents initial support, while a break below that level would expose the pair to the July 28 low at 1.1353. Market participants were also monitoring developments in the Middle East, with reports of a potential US-Iran agreement on the reopening of the Strait of Hormuz cited as a factor weighing on safe-haven demand for the US Dollar and supporting broader risk sentiment. Source: FXStreet, authored by Sagar Dua.
Technical analysis produced with the assistance of an AI tool.
Source: fxstreet.com