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  • EUR/USD is down smalls in the 1.1370/60 band on Thursday.
  • The FOMC left rates, bonds-purchase programme unchanged on Wednesday.
  • US Initial Claims, Producer Prices coming up next in the docket.

Following two consecutive daily advances, including fresh 3-month tops beyond 1.1400 the figure on Wednesday, EUR/USD has receded to the 1.1370/60 band at the time of writing on Friday.

EUR/USD looks to data, risk

In spite of the ongoing correction, the constructive prospect around EUR/USD looks unchanged and the yearly highs just below the 1.1500 mark still remains the near-term target.

The offered tone in the single currency follows the generalized correction in the broader risk-appetite universe and against the backdrop of the renewed buying pressure surrounding the dollar.

In fact, the greenback picked up extra pace in the second half of the week after the Federal Reserve suggested interest rates could remain at these low levels for longer (end 2022?), supporting the idea that the recovery from the coronavirus pandemic could take longer than initially estimated.

It is worth recalling that the Fed left unchanged its bonds-purchase programme and now sees the US economy contracting by around 6.5% in 2020 followed by moderate/strong rebounds in 2021 and 2022.

Later in the docket, the EuroGroup will meet to evaluate the potential candidates to succeed former President Centeno. Earlier in the session, French Non-Farm Payrolls rose 2.0% inter-quarter in Q1, surpassing consensus.

Across the pond, the usual weekly Claims will take centre stage once again seconded by May’s Producer Prices.

What to look for around EUR

EUR/USD has regained poise after weekly lows in the 1.1250 region recorded on Tuesday. The constructive view in the euro, however, remains well sustained by the gradual and relentless re-opening of economies in Europe and by the ongoing monetary stimulus announced by the ECB, Germany and the European Commission. On top, the solid performance of the region’s current account is also adding to the attractiveness of the shared currency.

EUR/USD levels to watch

At the moment, the pair is losing 0.10% at 1.1360 and faces the next support at 1.1241 (weekly low Jun.9) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1020 (200-day SMA). On the other hand, a break above 1.1422 (weekly/monthly high Jun.10) would target 1.1448 (50% Fibo of the 2017-2018 rally) en route to 1.1495 (2020 high Mar.9).

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