- US PPI unexpectedly falls in July, while jobless claims hit monthly highs.
- The dollar remains in negative territory, although US yields rise.
- EUR/USD rises for the fifth day in a row and remains below Wednesday’s high.
The EUR/USD failed to break above Wednesday’s highs around 1.0355 and pulled back. It is hovering around 1.0325 as the US dollar tries to recover during the American session on rising US yields.
Another indicator shows a slowdown in inflation in the US.
Data released on Thursday showed the US producer price index fell 0.5% in July, with the annual rate slowing to 9.8%, versus expectations for a 0.2% advance. On Wednesday, it was reported that the consumer price index was unchanged in July, against expectations for a 0.2% advance. On Thursday, a report from the US Department of Labor reported that initial jobless claims rose to 262,000 in the week ending August 6, the highest level since November. Continuous requests reached monthly highs.
Yields in the US are rising strongly despite signs of slowing inflation. Market participants continue to see an interest rate hike from the Fed at the next meeting of at least 50 basis points. The US 10-year yield stands at 2.84%, the highest in almost a week, while the 30-year yield is at the highest level since July 21, at 3.10%. The dollar index falls for the fourth day in a row and hovers around 105.00, after finding support again above 104.60.
EUR/USD reached a high of 1.0363 after the start of the American session, slightly below yesterday’s high. She failed to break it and backed away. So far it has found support at 1.0320. A break lower would expose the next support at 1.0305, followed by the daily low at 1.0274. The technical outlook looks bullish as long as EUR/USD remains above 1.2060/80.
Technical levels
Source: Fx Street
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