- EUR / USD bulls are approaching a critical level and are targeting a breakout of hourly resistance for the final sessions of the week.
- ECB sentiment turns aggressive, pulling the euro out of the slump on Thursday.
The EUR/USD it is attempting to correct the hourly downtrend in late New York, reaching hourly resistance near 1.1770. At the time of writing, the pair is down 0.42% to 1.1766 and has fallen on the day from a high of 1.1820 to a low of 1.1750.
The bears lost their balance on Thursday after a rally in the dollar. US Retail Sales rose 0.7% last month, driven in part by back-to-school purchases and child tax credit payments, while July data was revised down.
The data unexpectedly increased in August. The dollar rallied because the data has investors more optimistic about the US economic recovery that had started to look like it was losing steam. The data has bolstered investor expectations for next week’s policy meeting and how soon the US central bank will begin to reduce stimulus.
The ECB rate climbs up the road
However, in more recent trading, the euro received a much-needed boost from critical hourly support in the wake of news that the European Central Bank hopes to hit its elusive 2 percent inflation target by 2025, based on unpublished internal models. which suggest that it is on track to raise interest rates in just over two years.
In other data on Thursday, US Initial Unemployment Claims were higher than expected at 332,000 last week. “This increase in claims was due in part to seasonal adjustments for Labor Day and it is possible that some claims were delayed due to the disruption caused by Hurricane Ida,” analysts at ANZ Bank. earnings are trending down and it is too early to assume this has changed. ”
EUR / USD technical analysis
Price is on the verge of a critical resistance breakout that would pave the way for a deeper correction, possibly to previous lows as resistance, potentially one Fibonacci at a time.
In the meantime, however, a retest of the current support and cleavage of the W formation near 1.1760 could come first.
On the other hand, a breakout of the double bottom lows will leave the bears in control again.