EUR/USD loses traction before testing 1.2000, steadies around 1.1970

• EUR/USD is struggling to find direction on Thursday.
• US Dollar Index remains on track to close flat.
• Strong US data failed to help USD outperform its rivals.

The EUR/USD pair rose to its highest level in four weeks at 1.0995 on Thursday but struggled to preserve its bullish momentum. As of writing, the pair was posting small daily losses at 1.1968.

Falling US T-bond yields limit USD’s gains

Earlier in the day, the modest selling pressure surrounding the USD amid falling US Treasury bond yields helped EUR/USD edge higher. The data published by the US Census Bureau showed that Retail Sales Ä°n March surged by 9.8% on a monthly basis, surpassing the market expectation for an increase of 5.9%. Additionally, the weekly Initial Jobless Claims fell to 576,000, the lowest mark in a year, from 769,000.

Although the US Dollar Index (DXY) inched higher with the initial reaction to these data, it erased its losses with yields extending the daily slide. Currently, the benchmark 10-year US T-bond yield is losing nearly 6% on the day at 1.543% and the US Dollar Index is staying flat around 91.65.

On Friday, Eurostat will release the inflation data. Investors expect the Core Consumer Price Index (CPI) in the euro area to stay unchanged at 1.3% on a yearly basis in March. A weaker-than-expected reading could weigh on the shared currency and vice versa.

Later in the day, Housing Starts, Building Permits and the University of Michigan’s Consumer Sentiment Index will be featured in the US economic docket.  

Technical levels to watch for