- EUR/USD edges lower early Friday following Thursday's rally.
- The pair could stay bullish in case 1.0740/50 support area remains intact.
- Risk mood could impact market action ahead of the weekend.
EUR/USD broke out of its weekly trading range and reached its highest level in two weeks near 1.0790 on Thursday. The pair stages a technical correction early Friday but stays afloat above the key 1.0740/50 support area.
The number of initial claims for unemployment benefits in the US jumped to 261,000 in the week ending June 2 from 233,000 a week earlier, the US Department of Labor announced on Thursday. The reading surpassed the market expectation of 235,000 by a wide margin, causing markets to lean toward a no change in the Federal Reserve's policy rate next week. In turn, the benchmark 10-year US Treasury bond yield fell sharply and the US Dollar (USD) suffered heavy losses against its major rivals.
According to the CME Group FedWatch Tool, markets are pricing in only a 24% probability of the Fed raising the policy rate by 25 basis points on June 14.
Early Friday, the Euro Stoxx 50 Index trades flat and US stock index futures lose between 0.1% and 0.2%. In case markets remain cautious ahead of next week's key macroeconomic events, the USD could hold its ground in the American session.
Investors could readjust positions and book some profits heading into the weekend, ramping up the market volatility later in the day.
EUR/USD Technical Analysis
EUR/USD broke above the 100-period Simple Moving Average (SMA) on the four-hour chart, currently located at 1.0740, for the first time since early May and closed the last four four-hour candles above that level. Additionally, the Relative Strength Index (RSI) indicator climbed above 60, reflecting a buildup of bullish momentum.
In case the 1.0740/50 (100-period SMA, Fibonacci 23.6% retracement of the latest downtrend) area is confirmed as support, buyers should remain interested. In that scenario, 1.0800 (Fibonacci 38.2% retracement, psychological level) and 1.0850/60 (200-period SMA, Fibonacci 50% retracement) could be seen as next bullish targets.
On the downside, EUR/USD could stretch lower toward 1.0720 (50-period SMA) and 1.0700 (psychological level) with a four-hour close below 1.0740/50.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD posts lowest daily close since December Premium
A strong US Dollar sent EUR/USD to reach a new low at 1.0488. The pair later stabilized around 1.0500, marking the lowest daily close since December 2022. The overbought US Dollar remains robust, driven by risk-off sentiment. Spain and Germany are set to release inflation data on Thursday.
GBP/USD rebounds modestly to 1.2150
GBP/USD reached a new multi-month low at 1.2110 and then rebounded modestly, finding resistance at the 1.2150 area. A strong US Dollar, suppored by risk aversion and higher Treasury yields, keeps the pair under pressure.
Gold collapses below $1,900 as fears back the USD Premium
Gold price turned south and dropped below $1,880 for the first time since March on Wednesday. After a downward correction in the European session, the benchmark 10-year US Treasury bond yield regained traction and rose toward 4.6%, causing XAU/USD to stretch lower.
Top 3 Price Prediction: BTC upward potential under threat
Bitcoin (BTC) along with Ethereum (ETH) and Ripple (XRP) prices are all at Catch-22 moments, testing key levels that will determine the next directional bias. Depending on how bulls play their hand, the next few hours could be a make or break moment for the top three leading cryptos.
Dow Jones Industrial Average Forecast: Risk of US government shutdown sends DJIA lower
The Dow Jones Industrial Average (DJIA) loses more ground on Wednesday. Anxiety is still top of mind with rebellious members of the US House of Representatives refusing to allow continuing spending bills to reach the floor for a vote.