EUR/USD: struggling around 1.1100, but intrinsically bullish

EUR/USD Current price: 1.1107

Euro buyers paused this Thursday, resulting in the EUR/USD pair correcting modestly lower after four days of strong gains. The pair reached 1.1171 during Asian trading hours, drifting lower afterwards, despite continued risk aversion. The absence of macroeconomic data during the London session favored the ongoing correction, now also backed by positive US data released ahead of Wall Street's opening. Weekly unemployment claims for the week ended May 12th were of 232,000 down 4,000 from the previous week and the lowest since 1973, indicating that the sector remains healthy. The Philadelphia Fed manufacturing survey, indicated that activity expanded at a faster-than-expected pace in May, with the survey jumping up to 38.8 from previous 22.0.

The pair is battling around 1.1100, clearly correcting lower in the short term, but with the dominant bullish trend firm in the background. Upcoming direction will solely depend on risk sentiment, although intraday technical readings favor further declines, given that in the 4 hours chart, technical indicators have turned sharply lower, leaving extreme overbought territory, whilst the price approaches is 20 SMA, heading north around 1.1080, providing a strong dynamic support. Below it, the next downward target comes at 1.1045, while in the case of a recovery, a break through the daily high should put the pair one step closer to 1.1260.

Support levels: 1.1080 1.1045 1.1000  

Resistance levels: 1.11230 1.1170 1.1210

View Live Chart for the EUR/USD

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