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EURUSD Losses Pile Up As Optimism Wanes Over US Rate Cuts

EURUSD declined on Thursday as the dollar was strengthened by hawkish comments by Federal Reserve Governor, Christopher Waller. The trading pair was down by 0.47% to trade at 1.0777 on a day with multiple USD-centric high-impact data scheduled. There are no composite Eurozone data releases on Thursday, although the block’s leading economies will release some medium-volatility data.

The first of the high-impact data to come out will be the Initial Jobless Claims and US 2023 fourth-quarter GDP figures. The former is expected to show a slight increase in first-time jobless insurance filings to 212,000 from 210,000. The latter is expected to show GDP growth of 3.2% in Q4 of 2023.

These will inject fresh impetus to the pair, but traders will certainly not ignore Governor Waller’s comments. Waller stated on Wednesday that the Fed was certainly not in a hurry to initiate interest rate cuts, dampening the sentiment around the expected three rate cuts in 2024. This will provide tailwinds for the dollar against the euro beyond the intra-day trading.

Meanwhile, the Eurozone’s largest economy, Germany, reported a 1.9%  decline in retail sales in February. The figure was lower than the consensus forecast that had projected a growth of 0.4%, and this has created headwinds for EURUSD.  However, the downside will be limited by the country’s unemployment change, which came in at 4,000, better than the forecast 10,000. The unemployment rate remained unchanged in March at 5.9%, meeting the forecast estimate.

Elsewhere, Italy’s consumer confidence fell lower than expected in March, while business confidence beat the forecast. Later in the day on Thursday, the Fed’s balance sheet and Chicago PMI figures could bring in more action into the EURUSD market.

Technical analysis

EURUSD is on the downward trend, as shown by the RSI on its 30-minute chart. The resistance at 1.0830 pivot favours control by the seller, with the first support at 1.0800. A continuation of this resistance will likely see the sellers break below 1.0800, which will see the next support move to 1.0785. However, moving above 1.0830 will signal control by the buyers, with the next resistance likely to come at 1.0845. A continuation of control by the buyers at that level will breach the resistance and potentially test 1.0860.