EUR/USD claws back nearly 35% of recent sell-off, focus on US jobless claims
- EUR/USD rose above 1.09 in Asia as markets offered dollar on the US fiscal stimulus hopes.
- Markets brace for the US jobless claims with talk it could exceed 1 million.
EUR/USD jumped to 1.0934 in Asia, erasing nearly 35 percent of the sell-off from 1.1495 to 1.0636 witnessed in the two weeks to March 23.
The spot crossed above 1.09 on the back of broad-based US dollar weakness. Markets offered greenback, possibly in hopes of the US fiscal stimulus.
As per the latest reports, the coronavirus fiscal stimulus bill has finally passed the US Senate and could be put to vote in the lower house on Friday. As a result, the global equities could extend Wednesday's relief rally, leading to deeper losses in the safe-haven US dollar and further gains in EUR/USD.
US jobless claims eyed
"Thursday’s jobless claims report will be a big test for the dollar’s safe-haven status. Economists are looking for claims to rise to 1.5 million, but they could be much worse," noted BK Asset Management's Kathy Lien.
The Initial Jobless Claims are forecasted to have risen to 1,000K in the week ended March 20 from the preceding week's 281K figure. If jobless claims are in the 2 to 3 million range, which is completely feasible, we could see a significant sell-off in the US dollar, according to Lien. In that case, the EUR/USD spot could find acceptance above the 50-day moving average at 1.10.
Apart from the jobless claims, the pair could also take cues from the Kansas Fed Manufacturing Activity index for March. Meanwhile, the European Union is holding an emergency summit to discuss further measures to fight the virus. There is consensus in the market that the Eurozone is headed for a deep recession and needs aggressive stimulus to stem the fallout from the virus outbreak.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
