Dollar rally slows after jobless claims; EURUSD ready to rise?
EUR/USD has just touched a key support zone on the daily chart between 1.0900 and 1.0950, an area that previously acted as resistance in March and July 2024 but now appears to be turning into support.
Yesterday’s candle formed a long lower shadow, signaling a possible rejection of selling pressure and a hint of buying strength. Additionally, the 1.0950 level aligns with the 61.8% bullish Fibonacci retracement on the daily chart, further reinforcing the potential for support.
A little further down, the 200-day Simple Moving Average (SMA) appears to be strengthening the whole area and increasing the possibility of it working as a support level.
Several factors are currently converging around the 1.0950 mark:
1. EUR/USD is in a former resistance area, which now appears to be functioning as support on the daily chart.
2. The 61.8% Fibonacci bullish level is present at 1.0950.
3. The 200-day SMA adds strength to the support zone.
4. A daily candle with a long lower shadow suggests initial buying strength.
Higher-than-expected US inflation data leads to short-term strength in USD, fades after jobless claims
From a macroeconomic perspective, the release of CPI data in the US, which came in higher than expected, initially boosted the US dollar at the start of the trading session. However, optimism about the dollar faded by the end of the day, causing the price to retrace and leave a long shadow on the daily candle.
This shift was driven by higher-than-expected Initial Jobless Claims (258,000 actual vs. 231,000 forecast), reminding investors that the Federal Reserve is balancing two objectives: controlling inflation while protecting the labour market. As a result, despite higher inflation, the Fed may remain lenient to support job growth in the short term.
Based on these factors, if EURUSD manages to break above the 1.0960 level, it may rise to 1.1010 and 1.1090 over the next few days.
Alternatively, if EURUSD breaks below 1.0890, it could fall to 1.0775, where a significant support area is likely to be found.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Yesterday’s candle formed a long lower shadow, signaling a possible rejection of selling pressure and a hint of buying strength. Additionally, the 1.0950 level aligns with the 61.8% bullish Fibonacci retracement on the daily chart, further reinforcing the potential for support.
A little further down, the 200-day Simple Moving Average (SMA) appears to be strengthening the whole area and increasing the possibility of it working as a support level.
Several factors are currently converging around the 1.0950 mark:
1. EUR/USD is in a former resistance area, which now appears to be functioning as support on the daily chart.
2. The 61.8% Fibonacci bullish level is present at 1.0950.
3. The 200-day SMA adds strength to the support zone.
4. A daily candle with a long lower shadow suggests initial buying strength.
Higher-than-expected US inflation data leads to short-term strength in USD, fades after jobless claims
From a macroeconomic perspective, the release of CPI data in the US, which came in higher than expected, initially boosted the US dollar at the start of the trading session. However, optimism about the dollar faded by the end of the day, causing the price to retrace and leave a long shadow on the daily candle.
This shift was driven by higher-than-expected Initial Jobless Claims (258,000 actual vs. 231,000 forecast), reminding investors that the Federal Reserve is balancing two objectives: controlling inflation while protecting the labour market. As a result, despite higher inflation, the Fed may remain lenient to support job growth in the short term.
Based on these factors, if EURUSD manages to break above the 1.0960 level, it may rise to 1.1010 and 1.1090 over the next few days.
Alternatively, if EURUSD breaks below 1.0890, it could fall to 1.0775, where a significant support area is likely to be found.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
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