EUR/USD Bears Eye $1.0650 on Revisions to Q1 GDP Numbers

It is a relatively busy Thursday session for the EUR/USD. French employment numbers will draw interest early in the session. However, we don’t expect the numbers to have a material impact on the EUR/USD.

The second estimate of GDP numbers for the Eurozone will move the dial. According to first estimates, the Eurozone economy stalled in Q1 versus 0.1% growth in Q4. Downward revisions would question the ECB’s hawkish monetary policy goals.

With the Eurozone economy in the spotlight, investors should monitor central bank chatter throughout the session. However, no ECB members are on the calendar to speak today, leaving commentary with the media to influence.

EUR/USD Price Action

This morning, the EUR/USD was up 0.08% to $1.07068. A mixed start to the day saw the EUR/USD fall to an early low of $1.06924 before rising to a high of $1.07115.

Technical Indicators

Resistance & Support Levels

The EUR/USD has to avoid the $1.0702 pivot to target the First Major Resistance Level (R1) at $1.0736 and the Wednesday high of $1.07396. A return to $1.0720 would signal a bullish session. However, the EUR/USD needs central bank commentary and economic indicators to support a breakout session.

In the case of an extended rally, the bulls will likely test the Second Major Resistance Level (R2) at $1.0773. The Third Major Resistance Level (R3) sits at $1.0845.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0665 into play. However, barring a risk-off-fueled sell-off, the EUR/USD pair should avoid sub-$1.06. The Second Major Support Level (S2) at $1.0631 should limit the downside. The Third Major Support Level (S3) sits at $1.0559.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The EUR/USD sits below the 50-day EMA ($1.07176). The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($1.07176) and R1 ($1.0736) would give the bulls a run at the 100-day EMA ($1.07573) and R2 ($1.0773). However, failure to move through the 50-day EMA ($1.07176) would leave S1 ($1.0665) in view. A move through the 50-day EMA would send a bullish signal.

The US Session

It is another quiet US session. US initial jobless claims will draw interest early in the session.

With hiring continuing to impress, a sharp increase in jobless claims would support a more dovish Fed pause in June. However, economists forecast jobless claims to increase from 232k to 235k.

While the economic calendar is light, no FOMC members are speaking today. The Fed entered the blackout period that ends on June 15.

According to the CME FedWatch Tool, the probability of a 25-basis point June interest rate hike increased from 21.8% to 33.8% versus 26.4% one week earlier.