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  • US Dollar Index advances to 95 for the first time in  two weeks.
  • Fed’s Powell reiterates that gradual rate hikes boost the economic growth.
  • EUR/USD tests the critical 100-DMA in the first hour of the Asian session.

Although the trading volume has thinned out in the late NA evening, the EUR/USD pair continued to push lower and touched its lowest level in 10 days at 1.1640. As of writing, the pair was trading at 1.1642, losing 100 pips, or 0.85% on the day.

Thursday’s upbeat macroeconomic data releases from the United States boosted the demand for the greenback, which was already gathering strength against its rivals following yesterday’s FOMC event, and weighed on the USD denominated pairs. As expected, the third estimate of the second quarter real-GDP growth in the U.S. remained unchanged at 4.2%, and durable goods orders rebounded with a 4.5% rise in August following July’s 1.2% decline.  

Assessing the USD’s performance, “Between Chairman Powell’s comment  yesterday the that the U.S. economy is in a particularly good spot and today’s robust durable good orders and excellent  business spending, despite the August pause the six months to July saw the strongest investment spending in five years, the dollar has room to run on the American economy alone,” FXStreet Senior Analyst Joseph Trevisani said. Fueled by the data, the US Dollar Index advanced to its highest level in two weeks at 95.

Meanwhile, speaking at an event for Rhode Island business leaders hosted by Democratic Senator Jack Reed on Capitol Hill, Federal Reserve Chairman Jerome Powell repeated that the gradual path of interest rate rises was helping to sustain the strong economic growth to help the buck preserve its bullish momentum.

Meanwhile,  Italy’s Deputy Prime Minister Salvini announced that the Italian government agreed on a 2019 budget deficit at 2.4% of the GDP. Nevertheless, this announcement did little to nothing help the shared currency recover its losses.

Friday’s economic calendar will feature the import price index and the unemployment report from Germany. Later in the day, investors will be focused on the core-PCE price index, the Fed’s favourite gauge of inflation, from the U.S.

Technical outlook

At the moment, the pair is testing the critical 1.1640 (100-DMA) support. With a decisive break below that level, the pair could extend its losses to 1.1570 (Sep. 12 low) and 1.1500 (psychological level). On the upside, near-term resistances could be seen at 1.1665 (20-DMA), 1.1755 (Sep. 27 high) and 1.1815 (Sep. 24 high).