EUR/USD holds higher ground around 1.0650 ahead of US data

EUR/USD is picking up fresh bids to trade around 1.0650 in typical pre-New Year thin market conditions. The pair is finding fresh demand from a mild improvement in risk sentiment. which is further weighing down on the US Dollar. US Jobless Claims data eyed.  

EUR/USD has declined below 1.0650 in the second half of the week as the risk-averse market environment helped the US Dollar find demand. The pair, however, stays within its horizontal trading range and the technical outlook doesn’t offer any directional clues for the time being.

Investors grow increasingly concerned over the negative implications of China’s reopening on the global economy. Several countries, including the US, Italy and South Korea, already decided to impose restrictions on travellers arriving from China.

Additionally, escalating tensions between Russia and Ukraine further weigh on the market mood. Russia’s Foreign Minister Sergei Lavrov said that they will not negotiate with Ukraine based on Ukrainian President Volodymyr Zelenskiy’s ‘peace formula.’ Meanwhile, several news outlets reported earlier in the day that Russian missile strikes caused explosions in Kyiv and Kharkiv.

On Wednesday, Wall Street’s main indexes lost more than 1%. Currently, US stock index futures trade marginally higher on the day. In case safe-haven flows start to dominate the financial markets in the second half of the day, EUR/USD could come under renewed bearish pressure and vice versa.

The US Department of Labor will release the weekly Initial Jobless Claims data, which is unlikely to have a noticeable impact on the US Dollar’s performance against its rivals.

TRADE SUGGESTION- BUY AT 1.06260, TAKE PROFIT AT 1.06819, SL AT 1.05872