While the USD has staged an impressive recovery in the past week, positive ADP figures coupled with lower than expected jobless claims paint the picture of an economy starting to run a bit too hot. While the Fed unlikely to hike rates any further than they have already projected in this calendar year, more jobs and a fast growing economy means inflation abound. Price action is currently hovering above a point of considerable S/R formed in late April / early March, which appears to be holding back downside momentum for the moment. A reversal to the upside is likely, given the bullish setup and the forthcoming fibonacci time zone that has been exhibiting some influence on major swings in the pair. Given that NFP is coming up, I expect a dollar selloff in response to the already priced-in positive news (as we saw in response to last month's report).
