The EUR/USD currency pair faced challenges on Thursday, following a decline that left it struggling to gain momentum after a negative close the previous day. The technical outlook over the short term suggests a muted interest from buyers. Market attention is directed towards the upcoming US economic data, particularly the weekly Initial Jobless Claims and the September ISM Services PMI, which may influence trading activity.
After a steep drop on Tuesday, EUR/USD continued to weaken, reaching its lowest point in three weeks, falling below the 1.1030 threshold. While the pair experienced a slight rebound to around 1.1050 in the European morning session, the prevailing risk-averse environment and encouraging private sector employment figures from the United States helped sustain the strength of the US Dollar. Additionally, remarks from officials at the European Central Bank have dampened sentiment for the EURO , with indications of risks to Eurozone growth being predominantly negative. These sentiments highlight concerns about the Eurozone’s ability to meet inflation targets.
As investors look forward to the American session, attention will focus on the weekly Initial Jobless Claims report, with expectations of around 220,000 new unemployment filings for the week ending September 28. A count approaching 200,000 might bolster the USD ahead of the important Nonfarm Payrolls data due on Friday. In addition, the market will analyze the ISM Services PMI for September; a reading below 50 would likely reignite fears of an economic slowdown in the US and could hinder the Dollar’s performance relative to other currencies.
The technical landscape for EUR/USD shows the pair hovering near 1.1040, coinciding with the Fibonacci 38.2% retracement of its recent upward movement. A failure to hold above this level could attract sellers, with potential support seen at 1.1000 (Fibonacci 50% retracement) followed by 1.0940 (Fibonacci 61.8% retracement). Conversely, reclaiming 1.1040 might lead to resistance around 1.1100, where the 100-period and 200-period Simple Moving Averages intersect with the Fibonacci 23.6% retracement level, ahead of 1.1150, a significant static point.
