EUR/USD Forecast: Traders battle around 1.0700
|EUR/USD Current Price: 1.0699
- The EU Producer Price Index jumped to 37.2% YoY in April, while the March reading was upwardly revised.
- US employment data was mixed, as the private sector added just 128K new positions in May.
- EUR/USD hovers near 1.0700 with limited bullish potential in the near term.
The EUR/USD pair recovered some ground early on Thursday and approached the 1.0700 threshold before giving up some ground ahead of the release of US employment data. Demand for the greenback receded as Treasury yields retreated from their recent highs, although stocks markets struggled to post gains as concerns remain the same.
Data coming from the EU was far from encouraging as the Producer Price Index jumped to 37.2% YoY in April, while the March figure was upwardly revised from 36.8% to 36.9%.
The US released the May ADP survey, which showed that the private sector created 128K new job positions in the month, worse than anticipated. The country also published Initial Jobless Claims for the week ended May 27, which decreased to 200K, beating expectations. Finally, Nonfarm Productivity in the first quarter of the year was down 7.3%, while Unit Labor Costs in the same period increased by 12.6%. Later in the day, the US will release April Building Permits and Factory Orders for the same month.
EUR/USD short-term technical outlook
The EUR/USD pair hovers around 1.0700, as US employment data had no impact on financial markets. From a technical point of view, chances are skewed to the upside, according to the daily chart. The pair is trading above a mildly bullish 20 SMA, while technical indicators stand at positive levels, although without directional strength. In the meantime, the pair is seesawing around a Fibonacci level, the 38.2% retracement of its 1.1184/1.0348 slide at 1.0665.
The 4-hour chart, on the contrary, indicates that the pair could resume its decline. After bouncing from a mildly bearish 200 SMA, the pair remains below a bearish 20 SMA. Technical indicators have recovered from near oversold readings but have lost their upward strength within negative levels, reflecting limited buying interest. Bears would have better chances on a break below 1.0626, so far, the weekly low.
Support levels: 1.0625 1.0580 1.0525
Resistance levels: 1.0700 1.0750 1.0790
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