EUR/USD Forecast: Needs To Hold Above 20-Day SMA To Keep Focus On The Upside

• EUR/USD retreats from the 1.1370 as market sentiment deteriorates.
• US Initial Jobless Claims came in better than expected but were largely ignored.
• The pair needs to hold above 20-day SMA to keep focus on the upside.

After reaching a fresh four-week high during the Asian session at 1.1370, EUR/USD came under pressure and accelerated to the downside in the New York trade, turning negative for the day. A bout of dollar demand, a retreat in Wall Street indexes made the market mood swing evident. Renewed concerns about the COVID-19 pandemic, coupled with a Supreme Court ruling granting access to a New York Prosecutor to US President Donald Trump's tax returns, cast a shadow over investors.

US data failed to boost market mood and went largely unnoticed. There were 1,314,000 initial claims for unemployment benefits in the US during the week ending July 4th, following the previous week's print of 1,413,000 (revised from 1,427,000) and slightly better than the market expectation of 1,375,000.

The EUR/USD pair retreated sharply from its daily peak of 1.1370 and slid back below the 1.1300 mark. The pullback also sent the pair back below a descending trendline coming from February 2018 highs, questioning bulls' ability to sustain the upmove. The short-term technical picture has deteriorated, with indicators falling below their mid-lines in the 4-hour chart. However, the bias remains slightly bullish in the daily chart, with 1.1400 as the next target. The EUR/USD needs to hold above the 20-day SMA at 1.1255 to keep focus on the upside, while a loss of this level could point to a deeper correction to the 1.1190-70 area.  

Support levels: 1.1255 1.1190 1.1168

Resistance levels: 1.1370 1.1400 1.1422

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