EUR/USD Daily Forecast – Euro Eases Lower After Touching 4-Week HighEUR/USD rallied to fresh highs not seen since early June in Asian trading but has since pared back some of its gains.
A weaker dollar has benefited EUR/USD and most of the major currencies, causing a rally to 1.1370 in the pair earlier today during the Asian session.
The exchanged rate has pared back some of its gains since then but continues to hold above the 1.1300 handle. A range that began in early June remains intact and highlights major resistance between 1.1380 and 1.1400.
With a relatively light economic calendar in the session ahead, it remains to be seen if the currency pair can extend on the earlier momentum. The highlight today will be the weekly unemployment claims report which analysts expect will show an additional 1.4 million jobs lost in the United States.
US equity markets bounced back which has been weighing on the dollar. The S&P 500 closed for three-quarters of a percent gain on Wednesday to erase losses from the previous day. This has led the dollar to turn lower against most its major counterparts with the trade-weighted index (DXY) briefly trading at a 4-week low earlier in the day.
Earlier in the week, the European Commission downgraded its economic forecasts for this year and next year as the easing of lockdown restrictions is taking longer than they had earlier assumed. The markets appear to have shrugged off the news with the single currency showing the second largest gain for the week among the majors.
EUR/USD shows upward momentum but is seen once again battling resistance that had held it lower in late June.
With the broader range intact, the pair is at risk of further losses in the session ahead. Although it should be noted that the short-term momentum this week has been to the upside.
If EUR/USD is able to overcome resistance at 1.1330 on a sustained basis, the next level of upside interest falls at the 1.1400 handle. Support for the session ahead is seen at 1.1289.
- The dollar has come under pressure as risk sentiment has improved since yesterday which has underpinned the EUR/USD exchange rate.
- The economic calendar is light in the session ahead, the highlight will be the US jobless claims report.
For a look at all of today’s economic events, check out our economic calendar.