EUR/USD tumbles to 1.1200 handle after stellar ADP report

The EUR/USD pair maintained its offered tone and is now fast approaching the 1.1200 handle following the release of US private sector employment data.

Spot ran through some fresh offers after the ADP National Employment report revealed private employers added 253K new jobs during May, surpassing even the most optimistic estimates and was also far better than 177K recorded in the previous month. 

The data reaffirmed the underlying strength in the US labor market and might have also lifted expectations from Friday's official figures (NFP).

Meanwhile, hawkish comments from the Federal Reserve governor Jerome Powell, noting that gradual rate-hikes would be appropriate provided an additional boost to the US Dollar's recovery move and dragged the major farther from yearly tops, back closer to the 1.1200 handle. 

Today's US economic docket also features the release of weekly jobless claims, which would be looked upon for some trading impetus ahead of the ISM manufacturing PMI.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair retains its positive tone despite the lack of momentum according to intraday charts, given that in the 4 hours chart, the price is developing above bullish moving averages, whilst technical indicators hold well into bullish territory, although turning marginally lower. 1.1200 is the immediate support, followed by 1.1160. Below this last, the risk of a downward extension increases, but always as corrective as long as 1.1080 remains intact."

"An upward extension above 1.1265, on the other hand, should indicate increasing demand, with the pair then poised to advance up to 1.1300 first, and 1.1345 later on the day," she added.