Yesterday, the U.S. dollar suffered significantly after a weak ADP employment report; however, the negative figures were partially offset by strong data on growth in U.S. services sector activity.

According to data from the Institute for Supply Management, the index rose by 0.2 points, reaching a nine-month high of 52.6. Recall that a reading above 50 indicates growth in most sectors of the economy.

This mixed picture in the market creates substantial uncertainty regarding the further direction of the U.S. currency. On the one hand, labor market weakness, reflected in an unexpected decline in employment, puts pressure on the dollar and heightens concerns about slowing economic growth. Investors begin pricing in expectations of a more accommodative Federal Reserve policy, which is traditionally considered a negative factor for the national currency.

On the other hand, the rise in activity in the services sector—which represents a significant portion of the U.S. economy—signals continued resilience.

Looking more closely at the indices, the picture is as follows: the ISM services and materials prices index showed its slowest growth in seven months. Despite still being at historically high levels, it points to some easing of inflationary pressure. The deliveries index rose by 3.3 points, reaching its highest reading in more than a year. This growth was likely driven by disruptions in air transportation due to the government shutdown and by customs-related tariff changes.

The ISM services business survey committee also reported that twelve industries experienced growth last month—primarily retail trade, entertainment and recreation, and hospitality and food services. Five industries, including construction, saw declines. "The continued growth of the business activity and new orders indices, as well as the highest backlog index reading since February, are positive signs of an emerging recovery in the services sector," the report noted.

Home sales continue to be constrained by mortgage rates. Most industry representatives describe the slowdown as a deliberate pause, while suppliers and workers foresee the possibility of margin reductions in the near future.

According to the same ISM data, inventories grew at their fastest pace in seven months. Nevertheless, inventory sentiment softened somewhat, indicating that fewer service providers consider their inventory levels too high.

As for the current EUR/USD technical picture, buyers now need to think about how to gain control above 1.1680. Only this will make it possible to target a test of 1.1705. From there, the price could climb to 1.1725, although doing so without support from major players will be quite difficult. The most distant target is the high of 1.1753. In the event of a decline, I expect significant buying activity only around 1.1650. If no one steps in there, it would be better to wait for an update of the 1.1625 low or to consider opening long positions from 1.1590.

As for the current GBP/USD technical picture, pound buyers need to take the nearest resistance at 1.3360. Only this will allow them to target 1.3395, above which breaking through will be quite difficult. The most distant target is the 1.3415 level. In the event of a decline, the bears will try to take control of 1.3320. If they succeed, a breakout of this range will deal a serious blow to the bulls' positions and push GBP/USD toward the 1.3290 low, with the prospect of reaching 1.3270.