EUR/USD Forecast: US unemployment soars, the Fed comes to the rescue

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0877

US weekly unemployment claims at 6606K, 10% of the country’s labour force out.
The Federal Reserve announced a new lending plan to provide $2.3 trillion in loans.
EUR/USD remains neutral amid uncertainty related to the coronavirus pandemic.

The EUR/USD pair has spent most of this Thursday confined to a tight range around 1.0850, as speculative interest is in need of fresher clues to push currencies one way or the other. The economic standstill due to the coronavirus pandemic continues, and hopes about a soon to come end have diluted throughout the week, as the number of global cases continues to increase alongside the death toll. Equities are up, preventing investors from falling into panic, but risk-sentiment stands at the edge of the cliff.

The ECB released the Accounts of its latest meeting, and the document showed that policymakers acknowledged the economic situation is deteriorating rapidly, adding that all members agreed on adding monetary stimulus.

Ahead of Wall Street’s opening, the US released Initial Jobless Claims for the week ended March 3, soared to 6606K, worse than the 5250K expected, while the previous week reading was upwardly revised to 6867K. This means that pretty much 10% of the US labour force is now out. At the same time, the US Federal Reserve announced a new lending plan to provide $2.3 trillion in loans to support the economy.

EUR/USD short-term technical outlook

Huge news triggered no reaction, as the EUR/USD pair continues to trade within familiar levels. The dollar eased a bit but the pair remains below 1.0900. The 4-hour chart shows that the pair is unable to advance beyond a Fibonacci resistance and a mild-bearish 100 SMA, while the 20 SMA stands a few pips below the current level. Technical indicators remain above their mid-lines but without directional strength, reflecting the absence of the market’s interest.

Support levels: 1.0830 1.0795 1.0750

Resistance levels: 1.0900 1.0940 1.0990

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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