EUR/USD bounced off year-to-date lows in the last days, up around 1.1360s
|- EUR/USD approaches the 1.1400 amid broad US dollar weakness.
- US Initial Jobless Claims continue to fall, benefitting the labor market.
- EUR/USD: Trading back below a 10-year old downslope resistance trendline.
At press time, the shared currency advances 0.41%, trading at 1.1368 during the New York session, amid broad US dollar weakness. In the overnight session, the EUR/USD was trapped within the 1.1320-40 range, though the US dollar weakened as the American session got underway, thus increasing the demand for the euro.
Falling US T-bond yields undermine the greenback
The US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, falls 0.25%, sitting at 95.55, undermined by falling US T-bond yields, with the 10-year note losing almost two basis points, down to 1.587%.
In the New York session, the US Bureau of Labor Statistics (BLS) revealed the Initial Jobless Claims for the week ending November 13. The number came at 268K, higher than expected, though a tad lower than the previous week’s reading, revised to the upside, to 269K. That said, it is the fifth consecutive drop in Jobless Claims, showing that the US labor market recovery is gaining traction.
Moreover, the Continuing Jobless Claims fell by 200K, unexpectedly from 2.209M down to 2.080M in the week ending on November 6.
On Thursday, some ECB policymakers cross the wires. in an Austrian University speech, European Central Bank (ECB) policymaker Robert Holzmann said that Quantitative Easing (QE) has to stop, given that inflation is likely to stay high.
Furthermore, Philip Lane, Chief Economist of the ECB, said that bottlenecks are not expected to worsen and will ease from here. According to Reuters, he added that he does not see inflation expectations moving above the ECB’s target.
EUR/USD Price Forecast: Technical outlook
EUR/USD pair broke below a 10-year old downslope trendline on October 29, which confluences with the 50-day moving average at that time. From that point, the shared currency depreciated 3.33% against the greenback, printing a new year-to-date low at 1.1260.
Despite the abovementioned, EUR/USD buyers opened fresh bets against the buck amidst an undergoing Federal Reserve bond tapering that would end by the middle of 2022. However, cautions is warranted, as the daily moving averages (DMA’s) reside well above the spot price, close to the 10-year downslope trendline, around the 1.1600 area.
In the case of an upside move, the first resistance level would be the psychological 1.1400. A break above the latter would expose the November 15 high at 1.1464, followed by the 1.1500 figure.
On the flip side, if EUR/USD bears would like to resume the ongoing downtrend, they need to hold the spot price below 1.1400. in that outcome, the first support would be 1.1300, followed by the year-to-date low at 1.1264.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.