- EUR/USD consolidates the recovery from monthly lows.
- Dollar dumped amid downbeat US economic releases.
- Next of note remains the US Michigan Consumer Sentiment.
EUR/USD pair is holding on to the overnight gains, consolidating the over 100-pips recovery from monthly lows of 1.1737 ahead of the European open.
The main currency pair witnessed good two-way businesses on Thursday, courtesy of the volatility in the US dollar across its main competitors. During the first half of the day, the greenback bulls cheered the Fed’s optimism on the economic outlook and knocked-off the major to the lowest levels in four weeks.
The confirmation of deflation seeping back into the Eurozone combined with the continued rise in coronavirus cases in the block also tempered the sentiment around the common currency. The Eurozone annualized CPI confirmed the -0.2% previous estimate.
However, the tide turned in favor of the EUR bulls after the dollar was dumped broadly following the release of the downbeat US jobless claims, Philly Fed manufacturing index and housing data.
Disappointing US data re-ignited concerns over the strength of the economic recovery. Wall Street stocks tumbled alongside the Treasury yields, which further dragged the US currency southwards.
Looking ahead, the US University of Michigan (UoM) Preliminary Consumer Sentiment data will remain in focus for fresh impetus on the spot. Meanwhile, the EUR docket remains light, with the second-liner German Producers Price Index (PPI) and Eurozone Current Account due for release.
EUR/USD: Technical levels
“Should the quote slip below 1.1843, 61.8% Fibonacci retracement of September 15-17 downside close to 1.1838 and 200-HMA surrounding 1.1830 will be the key to watch before taking additional selling positions. Until then, the 1.1900 threshold lures EUR/USD bulls before probing them with September 10 top near 1.1920, the 1.2000 psychological magnet and the monthly high of 1.2011,” FXStreet’s Analyst Anil Panchal notes.
EUR/USD: Additional levels
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