EUR/USD Forecast: Euro could try to break out of range after US data

EUR/USD stabilized near 1.0950 after snapping a two-day winning streak on Wednesday.
The near-term technical outlook fails to provide a directional bias.
Q3 GDP revisions and weekly Initial Jobless Claims will be featured in the US economic docket.

Eren Sengezer FXStreet

EUR/USD lost its traction in the second half of the day on Wednesday and closed in negative territory for the first time this week. Early Thursday, the pair moves sideways near 1.0950 as investors await macroeconomic data releases from the US.

In the late American session, Wall Street's main indexes turned south, reflecting a negative shift in risk mood. Following an uninspiring performance in the European session amid retreating US bond yields, the US Dollar (USD) Index benefited from souring market mood and registered small daily gains.

Early Thursday, US stock index futures trade in positive territory, pointing to an improving market mood. In turn, the USD Index struggles to build on Wednesday's gains and allows EUR/USD to hold steady.

The US Bureau of Economic Analysis will release the final revision to third-quarter Gross Domestic Product (GDP). The US economy is forecast to expand at an annual rate of 5.2%. A downward revision could weigh on the USD with the immediate reaction.

Market participants will also pay close attention to the weekly Initial Jobless Claims data. A reading close to 200K could support the USD, while a print above 220K could reflect looser conditions in the labor market and have the opposite impact on the currency's performance.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declined toward 50 and EUR/USD returned within the lower half of the ascending regression trend channel, highlighting a loss of bullish momentum.

On the downside, 1.0900 (psychological level, static level) aligns as first support before 1.0870 (100-period Simple Moving Average (SMA)) and 1.0850 (200-period SMA).

In case the pair manages to return within the upper half of the channel by making a 4-hour close above 1.0970 (mid-point of the channel), it could test 1.1000 (psychological level, static level) before targeting 1.1050 (static level).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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