EURUSD remains over 1.0700.
After falling to a new multi-month bottom around 1.0700 on Thursday, the EURUSD rebounded only little. The pair’s bearish bias remains although profit-taking and rising risk sentiment may give support ahead of the weekend.
The US Dollar gained ground versus its peers on Thursday. As weekly statistics indicated that the number of first-time claims for unemployment benefits fell to 216,000 in the week ending September 2 from 229,000 the previous week. Furthermore, unit labor costs for the second quarter were revised. The Bureau of Labor Statistics revised its initial estimate of 1.6% to +2.2%.
On Friday, the Euro Stoxx 50 opened marginally higher. Indicating a bullish shift in market mood. Furthermore, US stock index futures were last seen gaining by 0.2%. If Wall Street begins on a positive note and key market indices rise. The USD may struggle to find demand in the second half of the day.
Investors will also pay particular attention to Federal Reserve.
EURUSD Investors will also pay particular attention to Federal Reserve (Fed) officials’ statements. The Fed’s blackout period begins on Saturday, and officials may offer some closing statements on the outlook. On Thursday, New York Federal Reserve President John Williams told Bloomberg that inflation was heading in the correct way. However, he did not comment on potential future policy moves.
EURUSD Technical Analysis
On the 4-hour chart, the midpoint of the descending regression and channel, as well as the 20-period Simple Moving Average, create the first resistance at 1.0730.
A 4-hour close above that level might deter selling and pave the way for a new a EURUSD move upward toward 1.0770 (upper limit of the declining channel) and 1.0800 (psychological level, 50-period SMA).
On the downside, 1.0700 (psychological level, static level) was a solid support level. If that level fails, 1.0680 (the lower limit of the declining channel) might be considered as the next level of support before 1.0635 (the low on May 31).
