Following a three-day negative correction, EURUSD gained positive momentum. On Wednesday and surged towards 1.1000, reaching its highest level in six weeks in the process. However, the unfavorable move in risk sentiment observed on Thursday may restrict the pair’s gains.
FOMC Chairman Jerome Powell underlined to congressional legislators. On Wednesday that all FOMC participants believe it is fair to raise interest rates. “somewhat further” by the end of the year. Nonetheless, Powell refrained from announcing a rate rise in July, sending the market to fall. The US Dollar (USD) will weaken throughout Wednesday’s American trading hours. Powell will speak again later in the day, although he is unlikely to provide any new information on the policy outlook.
The Euro Stocks 50 Index is down more than 1% on the day, reflecting the gloomy market atmosphere. While US stock index futures are trading in the red.
Weekly Initial Jobless Claims in the United States are expected to be 260,000, down from 262,000 the previous week. If this data falls sharply, to the region of 220,000-230,000, the USD may remain strong versus its rivals. Another reading at or over 260,000, on the other hand, should harm the USD and aid the EURUSD stretch. higher with the quick reply.
If Wall Street’s main indexes start sharply lower, safe-haven flows may allow the USD to find demand even if jobless claims remain uncomfortably high. An increasing risk sentiment, on the other hand, should have the reverse effect and raise the EURUSD.
EURUSD Technical Analysis
The EURUSD pair is trading at the top limit of the ascending regression channel, and the four-hour chart’s Relative Strength Index (RSI) indicator is slightly above 70, implying that the pair may need to perform a downward correction before the next leg higher.
On the downside, 1.0960 (the ascending channel’s midpoint) serves as the initial support level, followed by 1.0920 (the ascending channel’s lower limit) and 1.0900 (the psychological level).
If the EURUSD is able to stabilize above 1.1000 (psychologically), It might aim for 1.1050 (static level) and 1.1100 (psychological level, static level).
