EUR/USD Daily Forecast – Euro Consolidates Near Prior Highs

The dollar initially looked like it was ready to continue dropping, in line with the trend we’ve been seeing since March. However, buyers have defended Friday’s low causing EUR/USD to hold below the 1.1900 level.

Economic data from Europe today has been fairly light. In the North American session, the US will release its latest unemployment claims figures.

New jobless claims had fallen for 15 straight weeks until last week when it rose slightly. Analysts expect the figure to hold steady at this point, and if that’s the case, the exchange rate is not likely to have much of a reaction.

The latest data from the CDC shows the rate of new daily cases rising for three consecutive days. However, the rise is marginal compared to before and still well below the peak.

The data showed new cases at 50 thousand on August 4th after peaking at 75 thousand on July 24th.

PMI figures from the US yesterday were better than expected with the non-manufacturing PMI at 58.1 and services at 50. Both are signalling growth which stands to underpin any extreme downside fluctuations in the dollar.

The ADP report showed 167 thousand new jobs added in the US during July. It was well below the expectation for 1.2 million jobs. There was, however, an upward revision to show a gain of 4.3 million jobs in June from the originally reported 2.4 million.

Technical Analysis

EURUSD 4-Hour Chart

EUR/USD appears to be holding in a range as the 1.1900 has once again proven to be a hurdle.

The dollar is attempting to recover and therefore the exchange rate might trade in a range below 1.1900 until this recovery has completed.

Dips in the pair should offer buying opportunities while EUR/USD holds above strong support seen at 1.1760.

A break above 1.1900 could lead to a run towards the 1.2000 level.

Bottom Line

  • EUR/USD showed signs of resuming higher in its bullish trend on Wednesday but sellers continue to defend the 1.1900 price point.
  • The latest unemployment claims data will be released from the US later in the day.

For a look at all of today’s economic events, check out our economic calendar.