- US Dollar Index looks to close the day below 94 for the first time since early July.
- EUR/USD adds more than 100 pips on the day.
- Coming up: Markit Services & Manufacturing PMI from Germany and the euro area.
After finding an interim resistance at 1.1770 in the early NA session, the EUR/USD pair retreated to 1.1740 before gaining traction and advancing to its highest level since July 9 at 1.1784. At the moment, the pair is up 0.93% on the day at 1.1780.
The pair’s upsurge on Thursday seems to be a product of a broad-based greenback weakness. With investors staying focused on the upbeat data from the UK and Brexit headlines, the greenback struggled to find demand today and weakened against its rivals with the US Dollar Index plummeting to a fresh multi-week low at 93.83. Although the weekly jobless claims and the Philly Fed Manufacturing data from the U.S. came in better than analysts’ estimates, the index failed to make a meaningful recovery. As we approach the end of the trading day, the DXY was losing 0.7% at 93.88.
Earlier in the day, while delivering a speech in New York, ECB chief economist Peter Praet said that the euro area economy was expanding at a rate above its potential and added that he was confident about the inflation rate converging with the bank’s target.
On Friday, Markit will publish the Service and Manufacturing PMI reports for the euro area, Germany, and later the United States.
Technical outlook via FXStreet Chief Analyst Valeria Bednarik
The market seems to have stabilized ahead of Wall Street close, and things don’t look good for the greenback. The EUR/USD pair pulled back from the mentioned high but is now regaining ground after an intraday retracement held above the former resistance in the 1.1730 region, where the pair stalled its advance several times these last days, and where it set its high in August.
n the 4 hours chart, the pair bounced sharply from a now bullish 20 SMA while the Momentum indicator maintains its bullish slope above its 100 level. The RSI has reached overbought territory, partially losing upward momentum, but consolidating nearby, all of which favors another upward extension up to 1.1850, June monthly high.
Support levels: 1.1730 1.1695 1.1660
Resistance levels: 1.1790 1.1815 1.1850