The EUR/USD pair maintains its bullish momentum, trading at its highest level in nearly three weeks, above 1.0800 during the American session. The US Dollar faces heavy selling pressure following disappointing ADP and PMI data, which has fueled the pair’s rally.

Throughout the first half of Wednesday, the EUR/USD pair advanced as demand for the US Dollar waned following comments from Federal Reserve (Fed) Chairman Jerome Powell on Tuesday. Speaking at the European Central Bank (ECB) Forum on monetary policy in Sintra, Powell mentioned that the disinflationary trend is showing signs of resuming. However, he emphasized the need for more confidence before considering a policy rate reduction.

Meanwhile, the Hamburg Commercial Bank (HCOB) released the final Services and Composite PMIs for the Eurozone for June, upwardly revising previous estimates. The EU Composite PMI printed at 50.9. However, the official report noted: “The eurozone economy continued to grow at the end of the second quarter, although momentum was lost as the expansion,” indicating the index was at its lowest in three months.

In the United States, the ADP report on private job creation showed that the sector added 150K new positions in June, below the revised 157K from May and missing the 160K expected. Nela Richardson, ADP chief economist, stated: “Job growth has been solid, but not broad-based. Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.” Consequently, the US Dollar shed additional ground ahead of Wall Street’s opening.

Additionally, the US June Challenger Job Cuts report showed that US-based employers announced 48,786 cuts in June, down 23.6% from the 63,816 cuts in May. The May Goods and Services Trade Balance posted a deficit of $75.1 billion, which was better than anticipated. Finally, Initial Jobless Claims for the week ending June 28 surged to 238K, worse than the 235K anticipated by market players.

S&P Global is set to release the June US Services and Composite PMIs, while the official ISM Services PMI for the same month will also be published. Later in the American afternoon, the Federal Open Market Committee (FOMC) will unveil the Minutes of the latest monetary policy meeting.

Trade Idea

Disappointing US economic data and dovish Fed commentary weaken the USD, while upward revisions to Eurozone PMIs support the EUR.