- EUR/USD hit a new 16-month low at 1.1185, although it found strong support, recovers 1.1200.
- Following the release of the PCE, the US dollar index fell from 96.93 to 96.85.
- EUR/USD: Failure to hold above 1.1200 would expose May 2020 support around 1.1018.
EUR is unable to recover from three straight weeks of losses, down 0.49% and trading at 1.1195 during the U.S. session at the time of writing. A heavy dose of US economic data on Wednesday. Just before Thanksgiving, keeps EUR/USD traders glued to their screens for longer than expected.
Furthermore, risk aversion keeps the dollar on the rise, with the US dollar index nearing 97.00, a new 16-month high for the third time this week.
U.S. initial jobless claims rise below the 200,000 mark boosts dollar
The US macroeconomic docket issued US Initial Jobless Claims, Durable Goods statistics, and GDP figures early in the US session on Wednesday. Initial Jobless Claims rose to 199,000 during the week ending November 10, falling short of economists’ expectations of 260,000.
In addition, October’s excellent durable goods orders fell 0.5 percent more than the 0.4 percent decline projected by experts on a month-over-month basis. Orders grew more than predicted, gaining 0.5 percent versus 0.2 percent for the same period, excluding transportation. In addition, third-quarter GDP in the United States increased by 2.1 percent, matching market estimates.
Meanwhile, the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, climbed to 4.1 percent y-o-y in October, according to the US Bureau of Economic Analysis. This result was in line with consensus analyst predictions, and it verified a 0.4 percent improvement over last month’s upwardly revised reading of 3.7 percent.
EUR/USD Forecast: Technical Outlook
The EUR/USD daily chart displays a strong negative trend. The bearish movement appears to be overextended. Despite the fact that the daily moving averages (DMA) are still above the price of the pair. RSI oversold at 26. Indicating that the pair may be destined for a future drop, despite the fact that it is moving higher.
The 1.1100 number would be the first support level if the move lower was to continue. If the price falls below the aforementioned level, 1.1018 support will be revealed, followed by the May 25, 2020 low of 1.0870.
If EUR bulls retain the 1.1200 level, however, the 1.1300 level will be the first obstacle. However if the latter is broken, the November 18 high of 1.1374 will be revealed.