The EUR/USD currency pair is trading within a tight range near the 1.0400 level as Friday progresses. The cautious sentiment prevailing in the markets is likely to dampen any potential upward movement for the pair. Although there were slight gains observed after the Christmas break, the surge in bullish momentum was minimal, resulting in the current narrow trading channel around 1.0400.
Recent data from the U.S. Census Bureau indicated a decline in Initial Jobless Claims, with figures reaching 219,000 for the week ending December 21, a decrease from 220,000 the previous week. This performance surpassed the market’s expectations of 224,000; however, it had little effect on the valuation of the US Dollar. Furthermore, the performance of major Wall Street indexes remained mixed during the latter part of the day, limiting any upward potential for the EUR/USD pair.
Looking ahead, the economic calendar appears quiet, with no significant data releases scheduled for Friday. U.S. stock index futures are reflecting a negative trend, underscoring a cautious market attitude during the European trading session. Unless there is a significant improvement in market sentiment later in the day, the pair is likely to remain under pressure. Additionally, with trading volumes anticipated to be low, decisive movements in either direction for EUR/USD are improbable.
Technically, the Relative Strength Index (RSI) on the 4-hour chart hovers around 50, suggesting indecision in the market. Resistance levels were identified at approximately between 1.0430 and 1.0440, followed by 1.0475 and 1.0500. On the downside, if the pair fails to maintain the 1.0400 level, potential support levels may emerge at 1.0350 and 1.0300.
