EUR/USD Forecast: Buyers establishing a near-term floor at around 1.0500

EUR/USD Current Price: 1.0547

• US Initial Jobless Claims rose by 230 K in the week ended December 2, as expected.
• The better tone of Wall Street weighed on the dollar on an uneventful day.
• EUR/USD extended its gains for a second consecutive day, remains below 1.0600.

The EUR/USD pair got to advance on Thursday, settling at around 1.0540. The EUR benefited from the better tone of US equities, as Wall Street managed to revert its negative trend and edged higher. The American currency fell alongside demand for government bonds, which helped yields to recover some of their latest losses.

Data-wise, the macroeconomic calendar had little to offer. European Central Bank President Christine Lagarde delivered the opening remarks at a virtual conference hosted by the European Systemic Risk Board on Addressing Financial Stability Challenges, but she made no references to monetary policy.  Across the pond, the US published Initial Jobless Claims for the week ended December 2 which increased by 230K as anticipated. Soft employment figures also take their toll on the greenback.

On Friday, the EU will not publish macroeconomic data, while the US will release the November Producer Price Index. Inflation at wholesale levels is foreseen to increase by 7.4% YoY, easing from the previous 8%. The core annual reading, excluding volatile food and energy prices, is expected at 6%. The country will also unveil the preliminary estimate of the December Michigan Consumer Sentiment Index, expected to have contracted to 53.3 from 56.8 in November.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair maintains the risk skewed to the upside. The pair advanced for a second consecutive day above all of its moving averages, while the 20 SMA heads north above the longer ones. Technical indicators, in the meantime, head north, the Momentum further recovering from their midlines, while the RSI indicator aims marginally higher at around 66.

According to the 4-hour chart, the pair is neutral-to-bullish. EUR/USD trades a handful of pips above a directionless 20 SMA, while the longer ones are losing their bullish slopes, but are still far below the current level. Technical indicators, in the meantime, lack directional strength and barely hold within positive levels.

 seesaws around a directionless 20 SMA while developing above the longer ones. Technical indicators turned higher, but remain within neutral levels and without enough strength to anticipate a firmer advance. Bulls are defending the downside at around 1.0490, with little chances of a bearish breakout at the time being.

Support levels: 1.0490 1.0445 1.0400  

Resistance levels: 1.0565 1.0600 1.0640

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