EUR/USD Forecast: Technical buyers could show interest once 1.0800 turns into support
- EUR/USD edges higher toward 1.0800 after posting marginal gains on Wednesday.
- The near-term technical outlook points to a bullish tilt.
- A significant increase in US Initial Jobless Claims could hurt the USD.
EUR/USD registered small gains on Wednesday and continued to push higher toward 1.0800 early Thursday. Although the pair's near-term technical outlook highlights a bullish tilt, technical buyers could stay on the sidelines until 1.0800 is confirmed as support.
Improving risk mood made it difficult for the US Dollar (USD) to find demand on Wednesday but a late recovery in US Treasury bond yields helped the currency limit its losses, capping EUR/USD's upside.
Meanwhile, European Central Bank (ECB) policymakers continue to push back against market expectations for an early policy pivot and support the Euro. ECB Executive Board member Isabel Schnabel said that they must remain patient and cautious on risks of inflation flaring up again. Similarly, Governing Council member Boris Vujcic argued that they shouldn't rush to lower rates, citing resilience in services inflation and wages.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.06% | -0.07% | -0.13% | -0.26% | 0.15% | -0.82% | 0.72% | |
| EUR | 0.06% | -0.02% | -0.08% | -0.21% | 0.20% | -0.75% | 0.78% | |
| GBP | 0.07% | 0.01% | -0.07% | -0.20% | 0.22% | -0.74% | 0.78% | |
| CAD | 0.12% | 0.07% | 0.06% | -0.14% | 0.26% | -0.69% | 0.84% | |
| AUD | 0.26% | 0.21% | 0.20% | 0.13% | 0.41% | -0.54% | 0.98% | |
| JPY | -0.14% | -0.21% | -0.24% | -0.27% | -0.40% | -0.97% | 0.58% | |
| NZD | 0.80% | 0.75% | 0.74% | 0.67% | 0.54% | 0.95% | 1.52% | |
| CHF | -0.69% | -0.77% | -0.79% | -0.85% | -0.97% | -0.56% | -1.54% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Later in the day, the weekly Initial Jobless Claims data will be featured in the US economic docket. The market expectation points to 220,000 first-time applications for unemployment benefits in the week ending February 3, down slightly from 224,000 in the previous week. In case this reading comes in above 230,000, the immediate reaction could weigh on the USD. On the other hand, a print close to 200,000 could provide a boost to the currency.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 and EUR/USD close the last 4 4-hour candles above the 20-period Simple Moving Average (SMA), reflecting the bullish tilt.
On the upside, 1.0800 (Fibonacci 50% retracement level of the latest uptrend, 50-period SMA) aligns as immediate resistance. If the pair starts using that level as support, 1.0840 (100-period SMA) and 1.0870 (Fibonacci 23.6 retracement) could be seen as next hurdles.
Interim support is located at 1.0760 (20-period SMA) before 1.0700 (psychological level, Fibonacci 61.8% retracement).
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.
