Euro falls as strong US jobless claims support US Dollar

• EUR/USD falls near 1.1440 as stronger US labor-market data supports the US Dollar.
• US Initial Jobless Claims declined to 208K, while Retail Sales growth slowed to 0.2% in June.
• Eurozone core inflation is expected to remain at 2.4% YoY, with headline HICP forecast at -0.1% MoM.

EUR/USD trades lower near the 1.1440 area on Thursday, retreating around 0.2% as the US Dollar (USD) gains support from stronger-than-expected United States (US) labor market data.

US Initial Jobless Claims fell to 208K in the week ending July 11, below expectations of 217K and the previous 216K. The figures indicate that layoffs remain limited, supporting the Greenback despite signs of softer consumer spending.

US Retail Sales rose 0.2% MoM in June, matching expectations but slowing from May’s 1.0% increase. The Retail Sales Control Group advanced 0.5%, also in line with forecasts but below the previous 0.8%, suggesting that consumption momentum moderated.

In the Eurozone, investors await June inflation data. Core Harmonized Index of Consumer Prices (HICP) inflation is expected to remain at 2.4% YoY and 0.2% MoM, while headline HICP is forecast to decline 0.1% on the month. A softer inflation reading could strengthen expectations of a less restrictive European Central Bank (ECB) policy stance and place additional pressure on the Euro.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1436, maintaining a mildly bullish bias as it holds above both the 20-period Simple Moving Average (SMA) at 1.1428 and the 100-period SMA at 1.1413. The short-term trade is underpinned by these clustered SMA supports, while the Relative Strength Index (RSI) around 50 suggests balanced momentum after the recent recovery earlier in the week, hinting that dips could continue to attract buying interest as long as the pair stays over the moving average floor.

On the topside, initial resistance is located at 1.1447, followed by a tighter band of barriers at 1.1457, 1.1466 and 1.1472, where prior horizontal caps could slow further gains. On the downside, immediate support is seen at the 20-period SMA at 1.1428, with stronger structural demand emerging at the 100-period SMA near 1.1413; a sustained drop below this latter level would weaken the current constructive tone and expose deeper consolidation.

(The technical analysis of this story was written with the help of an AI tool. Know more.)