- EUR/USD extends recent rally above 1.0800.
- Dollar looks weak ahead of key US data release.
- Investors await the release of consumer confidence in the eurozone and preliminary CPI from Germany.
The common currency extends the weekly rise and leads the EUR/USD to stay firm above the 1.0800 level during the European session on Thursday. At time of writing, the pair is trading at 1.0872, up 0.26% on the day.
EUR/USD Focuses on Data and Dollar
EUR/USD has risen steadily since Monday and continues to consolidate the break of the 1.0800 barrier in a context dominated by the weakness of the dollar and a new improvement in risk appetite.
On the other hand, the new statements by the ECB reinforced the Arguments in favor of raising interest ratesafter Elderson, a member of the Council, affirmed that inflation is still too high and considered the central bank’s decision to raise rates at the March meeting “solid”. Elderson also suggested that the ECB will reduce its holdings in a balanced way.
Around the ECB, the Economic Bulletin forecasts average inflation of 5.3% this year, 2.9% in 2024 and 2.1% in 2025. In addition, GDP forecasts have been revised upwards in response to lower energy prices and the resilience of the national economy.
As for regional data, Eurozone Consumer Confidence will be released later, followed by Economic Sentiment. Besides, advanced inflation figures in Germany will be the center of attention of investors.
On the other side of the Atlantic, the weekly figures for unemployment benefit applications and the final results of growth of the fourth quarter GDP.
What can we expect around the EUR?
The weekly recovery of the EUR/USD pair does not stop and continues to target the 1.0900 area during the European session on Thursday.
Meanwhile, the pair’s price developments should closely follow the dynamics of the dollar, as well as possible next moves by the ECB in a context still dominated by high inflation, albeit amid diminishing recession risks.
At time of writing, the EUR/USD pair is gaining 0.26% on the day, trading at 1.0872. A break above 1.0929 (March 23 high) would target 1.1032 (Feb 2 high) on the way to 1.1100 (round level). On the opposite side, the next support lies at 1.0712 (March 24 low), followed by 1.0644 (100-day SMA) and 1.0516 (March 15 low).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.