- EUR/USD has gone into a consolidation phase following Wednesday's upsurge.
- Investors await first-quarter GDP report from the US.
- US stock index futures push higher in the European session.
EUR/USD has retreated to the 1.1050 area after having reached its highest level in over a year near 1.1100 on Wednesday. Although the US Dollar (USD) holds its ground early Thursday following the latest selloff, the pair's technical outlook suggest that it has the potential to continue to stretch higher in the short term.
The positive opening in Wall Street caused the USD to come under renewed selling pressure on Wednesday and the US Dollar Index (DXY) came within a touching distance of 101.00. As the benchmark 10-year US Treasury bond yield staged a rebound later in the American session to snap a two-day losing streak, however, the USD erased a portion of its losses and capped EUR/USD's upside.
Early Thursday, US stock index futures are up between 0.3% and 0.9%. Ahead of the opening bell, market participants will pay close attention to the US Bureau of Economic Analysis' first estimate of the real Gross Domestic Product (GDP) data, which is forecast to show an annualized expansion of 2%.
This data is unlikely to significantly influence the market pricing of a 25 basis points (bps) Federal Reserve (Fed) rate hike at next week's policy meeting. Nevertheless, a weaker-than-expected growth reading for Q1 could revive fears over the US economy tipping into recession. In turn, the "policy pivot" narrative could gain traction and trigger a fresh leg off USD selloff.
On the other hand, an upbeat GDP print should help the USD stay resilient against its rivals. Nevertheless, the USD's gains are likely to remain limited if risk flows dominate the financial markets.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the four-hour chart holds near 60, suggesting that EUR/USD has more room on the upside before turning technically overbought. Moreover, the pair closed the last six four-hour candle above the 20-period Simple Moving Average, reflecting the buyers' willingness to retain control.
On the upside, 1.1070 (end-point of the latest uptrend) aligns as initial resistance ahead of 1.1100 (psychological level, 13-month high set on Wednesday) and 1.1160 (static level from March 2022).
1.1025 (20-period SMA) forms dynamic support before 1.1000 (psychological level, static level). A four-hour close below the latter could discourage buyers and open the door for an extended slide toward 1.0970 (100-period SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds the bounce near 0.6400 amid signs of easing US-China trade tensions
AUD/USD attracts some dip-buyers to hold near 0.6400 in the Asian session on Wednesday. Hopes for a possible de-escalation in the US-China trade war boost investors' appetite for riskier assets and support the Aussie. Further, the pause in the US Dollar rebound also aids the pair's upside.
USD/JPY regains 142.00 as US Dollar finds its feet
USD/JPY has picked up fresh bids to regain 142.00, reversing the dip to near 141.50 in the Asian session on Wednesday. Signs of easing US-China trade tensions led to a sharp recovery in the risk sentiment, lifting the US Dollar broadly despite doubts over Trump's veracity.
Gold price is down but not out ahead of US PMI data
Gold price is heading back toward $3,400, stalling Tuesday's correction from the $3,500 mark, The US Dollar recovery fixxles, allowing Gold price to regain footing as investors remain wary about US President Trump's intentions. Trump said on Tuesday that he hopes for US-China trade war de-escalation and doesnt intend to fire Fed's Powell.
Why is the crypto market up today?
Bitcoin rallied above $93,000 on Tuesday alongside the broader financial market following Treasury Secretary Scott Bessent's statement at a closed-door meeting that the trade feud between the US and China is unsustainable.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.