- EUR/USD reversed its direction after testing 1.1400 on Thursday.
- US Dollar Index climbs above 96.50 during American session.
- Euro struggles to find demand as risk-aversion dominates markets.
The EUR/USD pair gained traction and rose to a daily high of 1.1402 during the American session. However, the risk-averse market environment boosted the demand for the safe-haven greenback and caused the pair to lose its traction. As of writing, the pair was down 0.47% on a daily basis at 1.1316.
DXY erases Wednesday’s losses
The broad-based selling pressure surrounding the USD on the FOMC’s dovish outlook lifted EUR/USD to its best level in three months at 1.1423 on Wednesday. The US Dollar Index (DXY) stayed relatively calm near 96.00 during the first half of the day on Thursday pressured by the falling US Treasury bond yields.
However, the sharp drop witnessed in major equity indexes in the US amid resurfacing fears over a second coronavirus wave allowed the DXY to stage a decisive recovery. At the moment, the index is up 0.56% on the day at 96.60.
The data published by the US Department of Labor showed that Initial Jobless Claims fell to 1.54 million from 1.9 million last week but was largely ignored by the market participants.
On Friday, Industrial Production data will be featured in the European economic docket. Later in the day, the University of Michigan’s Consumer Sentiment Index from the US will be looked upon for fresh impetus. Additionally, Richmond Fed President Thomas Barkin is scheduled to deliver a speech at 1400 GMT.
Technical levels to watch for
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