EUR/USD holds onto modest daily gains close to 1.1000.

Fundamental Overview

Rise in EUR/USD as Risk Sentiment Shifts, Mid-Tier US Data Awaited

During the European session, the EUR/USD pair continues to hold its ground at 1.1000, marking its monthly highs. However, the pair struggles to gather positive momentum due to the prevailing risk-averse market environment. The upcoming release of mid-tier US data could potentially influence its trajectory.

Powell’s Testimony Impacts USD Value, Euro Stoxx 50 Index, and US Stock Futures Reflect Market Sentiment

On Wednesday, FOMC Chairman Jerome Powell’s testimony to Congress caused the EUR/USD to gain bullish momentum and surge towards 1.1000. Powell emphasized the necessity of raising interest rates “somewhat further” by year-end but refrained from confirming a rate hike in July. This cautious approach led to a decline in the value of the US Dollar (USD) during American market hours. Powell is expected to testify again later in the day, although significant new information regarding policy direction is unlikely to be revealed. The Euro Stoxx 50 Index experiences a decline of over 1% for the day, while US stock index futures trade negatively, reflecting the prevailing gloomy market sentiment.

Impact of US Jobless Claims on USD and EUR/USD

The upcoming release of Initial Jobless Claims data in the US is projected to show a slight decrease to 260,000, compared to the previous week’s figure of 262,000. If these numbers demonstrate a sharp decline within the range of 220,000–230,000, the USD could maintain its strength against other currencies. Conversely, a subsequent reading of at least 260,000 could weaken the USD and contribute to an immediate rise in the EUR/USD pair. Additionally, in the event of uncomfortably high Jobless Claims, safe-haven flows might provide support for the USD if major indexes on Wall Street open significantly lower. Conversely, an increase in risk sentiment would have the opposite effect and potentially drive up the EUR/USD.

EUR/USD Technical Analysis Daily Chart

Technical Overview

The EUR/USD pair is currently trading within an upward channel, indicating positive market sentiment. It remains positioned above all Simple Moving Averages (SMA), reinforcing its overall bullish trend. The Relative Strength Index (RSI) signals bullishness, while the Stochastic oscillator suggests an uptrend.

• Resistance level: 1.0993
• Immediate support level: 1.0967

How to Trade EUR/USD

After experiencing a downturn, the EUR/USD swiftly reversed its direction and started an upward movement. Currently, it has surpassed its previous swing high and is trading near a significant resistance zone. If this zone is breached, further upside potential may emerge.

Trade Suggestion:

• Buy at 1.0993
• Take Profit at 1.1032
• Stop Loss at 1.0965

Remember to conduct a thorough analysis and consider your risk tolerance before making any trading decisions.

Conclusion

In summary, the EUR/USD pair sustains its modest daily gains near 1.1000 amidst a risk-averse market. The impact of Powell’s testimony, upcoming mid-tier US data releases, and the influence of Jobless Claims on the USD and EUR/USD remain key factors to monitor. Traders should remain vigilant and adapt their strategies accordingly to navigate the dynamic forex market.