EUR/USD clings to daily gains near 1.1760, focus on the ECB

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  • EUR/USD struggles for direction in the 1.1760 zone on Thursday.
  • The ECB will publish its Accounts of the latest meeting later in the session.
  • Attention will shift to the US weekly Claims in the NA session.

The single currency comes under some selling pressure and drags EUR/USD to the area of daily lows in the 1.1760/55 band on Thursday.

EUR/USD looks to USD, data, ECB

EUR/USD fades the initial spike to the 1.1780 region in the second half of the week on the back of alternating risk appetite trends and some mild recovery in the buck.

Earlier in the session, the German trade surplus shrunk to €15.7 billion during August, with Imports expanding nearly 6% and Exports rising 2.4%. In addition, ECB Board member Isabel Schnabel noted the markets’ resilience amidst the current scenario of increasing positive cases of COVID-19.

In addition, ECB VP Luis De Guindos reiterated that inflation expectations remain low and the door stay open for further action by the central bank.

Later in the docket, the ECB will release its Accounts (the ECB version of the Fed’s Minutes) of the latest event. Across the Atlantic, investors will closely follow another release of the weekly initial Claims in order to track the progress in the labour market.

What to look for around EUR

EUR/USD appears to have met a strong barrier in the 1.1800 area so far, where converge the 55-day SMA and just above the immediate resistance line. The pair’s outlook still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far cautious stance from the ECB and the solid position of the EMU’s current account.

EUR/USD levels to watch

At the moment, the pair is gaining 0.01% at 1.1760 and a break above 1.1807 (weekly high Oct.6) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18). On the flip side, the pair faces immediate contention at 1.1709 (38.2% Fibo of the 2017-2018 rally) seconded by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9).

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