- EUR/USD has stabilized above 1.0500 after having snapped a two-day losing streak.
- Technical picture points to a bullish tilt in the short-term outlook.
- The pair could gain traction in case risk flows return.
EUR/USD seems to have stabilized above 1.0500 early Thursday after having managed to close in the positive territory for the first time this week on Wednesday. The technical outlook suggests that buyers could retain control in the short term as long as the pair continues to trade above 1.0500.
The renewed US Dollar weakness amid falling US Treasury bond yields helped EUR/USD edge higher in the second half of the day on Wednesday. Amid growing concerns over the US economy tipping into recession next year, the benchmark 10-year US Treasury bond yield dropped to its lowest level since mid-September at 3.4%.
During the European trading hours, the 10-year US T-bond yield is recovering toward 3.5% and helping the US Dollar limit its losses for the time being. Meanwhile, US stock index futures trade modestly higher on the day.
The US Department of Labor's weekly Initial Jobless Claims data will be featured in the US economic docket but market participants are unlikely to react to this report. Hence, the risk perception could impact EUR/USD's action in the second half of the day.
In case Wall Street's main indexes start pushing higher after the opening bell, the US Dollar is likely to have a hard time finding demand and help EUR/USD push higher. A negative shift in risk mood could have the opposite impact on the pair.
European Central Bank (ECB) President Christine Lagarde is scheduled to deliver her pre-recorded opening remarks at a virtual conference hosted by the European Systemic Risk Board at 1200 GMT. Since the ECB is in the quiet period ahead of next week's policy meeting, Lagarde is likely to refrain from commenting on the policy outlook.
EUR/USD Technical Analysis
EUR/USD climbed above 1.0500, where the Fibonacci 23.6% retracement of the latest uptrend and the 20-period Simple Moving Average (SMA) on the four-hour chart is located. Additionally, the Relative Strength Index rose slightly above 50, pointing to a bullish tilt in the short-term outlook.
1.0540 (static level) aligns as interim resistance ahead of 1.0580 (end-point of the uptrend) and 1.0600 (psychological level).
On the downside, a four-hour close below 1.0500 could be seen as a bearish development and open the door for an extended slide toward the 1.0460/1.0450 area (50-period SMA, Fibonacci 38.2% retracement) and 1.0430 (Fibonacci 50% retracement, 100-period SMA).
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.