- Euro among the worst performers on Thursday.
- DXY rises after two days of declines, from highs.
- EUR/USD recovery meets resistance below 1.1135.
The EUR/USD made ground at 1.1067 after the start of the US session and then bounced back to the 1.1135 area as stocks trimmed losses on Wall Street. The dollar lost momentum as US yields remain near daily lows.
The euro is the worst performer in the G10 on Thursday, hurt by a drop in German yields and concerns about rising inflation in the euro zone. The IPC is due on Friday and could hit 7%.
In the US, data showed core PCE rose to 5.4% (year over year), initial jobless claims rose modestly to 202K from the lowest level since 1969, and Chicago PMI rose from 56, 3 to 62.9. The figures were mostly ignored by market participants. The official US employment report is due on Friday. The scoreboard consensus points to a payroll increase of 490,000 and a drop in the unemployment rate from 3.8% to 3.7%.
US yields appear stable on Thursday, hovering around recent lows. The 10-year yields stand at 2.32% and the 30-year yield at 2.45%. The Dow Jones falls 0.36% and the Nasdaq loses 0.27%.
Testing the 20 SMA on a 4 hour chart
EUR/USD’s correction from a four-week high near 1.1200 eased the upward pressure, but has so far not changed the current positive outlook for the euro. The pair recovered and managed to hold above the 20 SMA on a 4 hour chart (currently 1.1080) and retraced 1.1100.
A firm break below 1.1080 would change the current bias to neutral. Immediate and relevant support could be seen at 1.1035/40. On the upside, the 1.1135 area has once again become critical resistance. If the euro rises above a test of the weekly high at 1.1185, it should not be ruled out.
Technical levels
Source: Fx Street
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