- Sustained USD selling assisted EUR/USD to regain positive traction on Thursday.
- Sliding US bond yields, the risk-on mood continued weighing on the safe-haven USD.
- Disappointing US jobless claims did little to provide any respite to the USD bulls.
The USD selling bias picked up pace during the early North American session and pushed the EUR/USD pair to near two-week tops, around mid-1.2100s in the last hour.
Following the previous day’s pullback, the pair regained positive traction on Thursday and built on its recent recovery move from two-month lows, around mid-1.1900s touched last week. The momentum was exclusively sponsored by the prevalent US dollar selling, which remained depressed following the release of downbeat US Initial Jobless Claims.
Against the backdrop of Wednesday’s weaker US consumer inflation figures, dovish comments by the Fed Chair Jerome Powell and the prevalent upbeat market mood kept the USD bulls on the defensive. Powell indicated that easy policy is going to stay there for a long time and that the Fed isn’t considering raising interest rates from the current near-zero levels.
The global risk sentiment remained well supported by the progress in the rollout of vaccine for the highly contagious coronavirus disease. This, along with firming expectations for the passage of the US President Joe Biden’s $1.9 trillion COVID-19 stimulus package, continued boosting investors’ confidence and further dented the USD’s safe-haven status.
The greenback lost some additional ground after data released from the US showed that the number of Americans filing for unemployment-related benefits fell less than expected to 793K in the last week. The previous week’s reading was also revised higher from 779K report earlier to 812K and did little to provide any respite to the USD.
Bulls seemed rather unaffected by concerns that the delay in vaccination drive in Europe could hamper the economic recovery. Hence, it will now be interesting to see if the EUR/USD pair is able to capitalize on the momentum or meets with some fresh supply at higher levels.
Technical levels to watch
Share
