EUR/USD escapes Wednesday’s holiday volatility trap, set for wait to meaningful data

■  EUR/USD drifted mostly sideways on sedate Wednesday, heads into quiet Thursday.

■  Fiber traders will be on the lookout for Thursday’s US unemployment applications.

■  Friday looms ahead with PMI activity figures on both sides of the Pacific.

EUR/USD cycled on Wednesday with US markets out for a midweek holiday, and the Fiber heads into the back half of the trading week with mid-tier data on the offering, leaving investors to look ahead to Friday’s Purchasing Managers Index (PMI) activity figures for meaningful data releases to drive sentiment in either direction.

American markets will be back in action on Thursday, just in time for the release of the latest US Initial Jobless Claims for the week ending June 14. The median market forecasts anticipate a modest drop in new US jobless benefit claims to 235K from the previous 242K, but they are still expected to surpass the four-week running average of 227K.

The European Central Bank’s (ECB) latest Economic Bulletin is also expected early in the Thursday market window, but little new information is expected as the ECB rehashes what has already been covered in previous public appearances from ECB policymakers following the latest rate call.

Friday will end the trading week with a hectic thump. Pan-European PMI survey figures will begin dropping on markets starting at 07:30 GMT, to be followed by US PMI figures at 13:45 GMT. The Pan-European HCOB Manufacturing Purchasing Managers' Index (PMI) is expected to increase to 47.9 month-over-month (MoM) from 47.3, with the Services component forecasted to rise to 53.5 from 53.2. On the US side, both the Manufacturing and Services components are anticipated to decrease. The Manufacturing component is expected to ease to 51.0 from 51.3, and the Services PMI is forecasted to drop to 53.3 from 54.8.

EUR/USD technical outlook

The EUR/USD is currently facing resistance from the 200-hour Exponential Moving Average (EMA) at 1.0767, making it challenging for the currency pair to surpass the 1.0750 mark. Although it has shown some recovery from recent lows near 1.0670, the upward momentum is hindered. The daily candlesticks indicate a potential bullish move towards the 200-day EMA around 1.0800. 

However, the presence of technical resistance near 1.1140 from late December’s peaks is limiting bullish momentum. If this trend continues, the EUR/USD could experience a downside reversal, potentially leading to new lows for 2024, possibly falling below 1.0600.

EUR/USD hourly chart

EUR/USD daily chart