EUR/USD back below 1.2400 on stronger USD

• DXY accelerates during US session. 
• EUR/USD extends correction from 2-week highs. 

EUR/USD dropped below 1.2400 and hit a fresh daily low at 1.2383 on the back of a stronger US dollar across the board.

The greenback gained momentum during the US session and erased previous losses. On Asian hours, after Gary Cohn resignation as Trump's top economic adviser, the dollar bottomed. The US Dollar Index fell to 89.30, the lowest since February 20. Recently it reached a new daily high at 89.70. Equity prices in Wall Street are still down but far from lows. 

Earlier today the US ADP report showed that the private sector added 235K jobs during February, more than the 195K expected. January’s numbers were revised higher from 234K to 244K. The data supported very modestly the US dollar that resumed the upside hours after the report. 

The economic calendar shows the ECB meeting as the next key event. Tomorrow the central bank will announce its decision. No change in rates is expected and analysts consider the possibility of a modification to the easing bias. 

Levels to watch 

EUR/USD peaked earlier at 1.2444 but quickly pulled back toward 1.2400. Recently it broke that area and bottomed at 1.2383. At the moment, it trades at 1.2390, posting a loss of less than 10 pips. 

The intraday tone points to the downside with the next support seen at 1.2380 followed by 1.2360/65 and 1.2325/30. On the upside, if the euro recovers 1.2415 (20-hour moving average) a test of daily highs seems probable. Above the next resistances might lie at 1.2455 and 1.2475.