EUR/USD Forecast: Retreated From A Fresh Weekly High, Bearish Potential Limited

EUR/USD Current Price: 1.1800

• US Initial Jobless Claims fell below 1 million in the week ended August 7.
• This Friday, the US will unveil July Retail Sales and the Michigan Consumer Confidence Index.
• EUR/USD retreated from a fresh weekly high, bearish potential limited.

The EUR/USD pair has reached a fourth consecutive daily high this Thursday, hitting 1.1863 at the beginning of the US session, later retreating towards the current 1.1800 price zone. The dollar was out of the market’s favor for most of the day, only finding support in upbeat local data. US Initial Jobless Claims for the week ended August 7 fell to 963K, the first time below 1M since mid-March. Continuing Jobless Claims for the week ended July 31, shrank to 15.486M, also beating the market’s expectations. However, the news also gave support to equities, which traded with a sour tone in the first two sessions on the day.

In Europe, Germany reported July inflation, which remained unchanged at -0.1% YoY, failing to trigger some action across the board. This Friday, the EU will report the second estimate of the Q2 GDP, foreseen unchanged at -12.1%. The US, on the other hand, will publish July Retail Sales, seen up by 1.9%, and the preliminary estimate of the August Michigan Consumer Sentiment Index, seen at 72 from 72.5 in the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair has partially lost bullish strength, but a downward movement seems unlikely at the time being. The 4-hour chart shows that the pair keeps developing above all of its moving averages, with the 20 SMA currently heading marginally higher at around 1.1780. Technical indicators in the mentioned time-frame, have eased from weekly highs, the Momentum heading south within positive levels and the RSI currently flat at around 54.

Support levels: 1.1780 1.1730 1.1690

Resistance levels: 1.1870 1.1915 1.1950

View Live Chart for the EUR/USD