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The Euro (EUR) inched higher against the US Dollar (USD) on Friday, increasing the price of EURUSD to more than 1.1750 following some key economic events. The technical bias has however turned bullish because of a higher high in the recent upside rally.
EUR/USD Technical Analysis
As of this writing, the pair is being traded near 1.1767. A hurdle may be noted around 1.1800 (a short-term horizontal resistance area as well as psychological number) ahead of 1.1876 (the low of 2010) and then 1.1900 (the psychological number).
On the downside, a support can be noted around 1.1332 (a key horizontal support) ahead of 1.0839 (the low of the last major downside move) and then 1.0800 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 1.0839 support area is intact.
US Jobless Claims
The number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend remained consistent with a tightening labor market. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 244,000 for the week ended Aug. 5, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.
Economists polled by Reuters had forecast claims would be unchanged at 240,000 in the latest week. With the labor market near full employment, there is probably limited room for claims to continue declining. Claims have now been below 300,000, a threshold associated with a healthy labor market, for 127 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller. The unemployment rate is 4.3 percent.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels may be a good strategy in short to medium term.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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