EUR/USD Bulls to Target $1.1050 on Central Bank Chatter and US Stats

It is a quiet Thursday for the EUR/USD, with no economic indicators from the euro area to garner interest. The lack of economic indicators will continue to leave central banks in the spotlight.

After an extended period of alignment, ECB Executive Board members have divided views on policy goals beyond July. While ECB Chief Economist Philip Lane sees September as too far away, ECB hawk Isabel Schnabel sees doing too much rather than too little as the safer option.

With no economic indicators to consider, investors should monitor ECB commentary throughout the day. ECB Executive Board Members Fabio Panetta and Luis de Guindos are on the calendar to speak today. Investors should consider beyond July policy chatter that would move the dial.

EUR/USD Price Action

This morning, the EUR/USD was up 0.05% to $1.09912. A mixed start to the day saw the EUR/USD fall to an early low of $1.09816 before rising to a high of $1.09949.

Technical Indicators

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The EUR/USD sits above the 50-day EMA ($1.08860). The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($1.0931) and the 50-day EMA ($1.08860) would support a breakout from R1 ($1.1016) to give the bulls a run at R2 ($1.1046) and $1.1050.

However, a fall through S1 ($1.0931) would bring the 50-day EMA ($1.08860) and S2 ($1.0876) into play. A fall through the 50-day EMA would send a bearish signal.

Resistance & Support Levels

The US Session

Looking ahead to the US session, it is a busier day on the US economic calendar. US jobless claims and existing home sale numbers will be in focus.

The jobless claims will have more influence, with the US labor market a consideration for the Fed. An unexpected jump in jobless claims would support the Fed doves and an extended pause on monetary policy moves.

While the numbers will draw interest, we expect Fed chatter to have more influence. Fed Chair Powell will give the second day of testimony on Capitol Hill. However, barring a deviation from the Wednesday script, FOMC member commentary will likely garner more interest.

FOMC members Waller, Bowman, and Mester are on the calendar to speak today.

After Fed Chair Powell’s first day of testimony and mixed signals from FOMC members, bets on a July rate hike eased, albeit marginally.

According to the CME FedWatch Tool, the probability of a 25-basis point July rate hike stood at 71.9% on Wednesday versus 76.9% on Monday. The chances of the Fed lifting the Fed Funds Rate to 5.75% in September decreased from 12.3% to 10.8%.