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EURUSD Ascent Persists As Weak US Jobs Data Provides Fuel

The euro rose against the US dollar on Thursday, leveraging the dollar’s weak fundamentals to inch up by 0.26 percent. At the time of writing, the pair traded at 1.0776, keeping it on track to register a third successive week in green. The US dollar has weakened substantially during that period, staying below 106.00 in the last week. This is underlined by a series of soft macroeconomic data printouts in the last two weeks, with the downside seemingly far from over.

In the latest occurrence, it was reported that the US economy had an increase in Initial Jobs Claims filings to 231k, which was substantially higher than the forecast estimate of 212K. This has added to the belief that the US economic growth could contract further, as the effects of higher-for-longer inflation set in. The US economy grew at a slower rate than expected in the first quarter of 2024, rising by 1.6% against a forecast 2.4%. Nonetheless, most Fed members are still in favour of prioritizing tackling inflation, stating that the economy is still on a stable growth path.

On the other hand, the Eurozone has managed to strike a balance between tackling inflation and growing the economies. April Inflation stood at 2.4%, bringing it closer to the target 2%. Nonetheless, some analysts believe that the ECB will likely wait longer before announcing rate cuts.  Furthermore, ECB governing council member, Robert Holzmann, said on Wednesday that there was no need to rush to cut rates before there’s enough evidence that inflation has been contained.

Technical analysis

The EURUSD currency pair is currently on an upward momentum, and will likely pivot at 1.0768. The upside is likely to prevail if the price action stays above that mark. That could result in breaking the resistance at 1.0786 and potentially build up gains to test 1.0800 in extension. However, if the price moves below the pivot mark, the sellers will likely be in control, with the first support coming at 1.0749. If the downward momentum persists, the first support could be broken, and potentially move the pair lower to 1.0731.