EUR/USD unable to recover, prints fresh low at 1.1130
- US dollar holds onto daily gains across the board.
- EUR/USD heads for the lowest daily close since June 2020.
- US Q4 GDP comes above expectations, Jobless Claims slide and Durable Goods Orders decline more than expected.
After a brief recovery, the EUR/USD dropped to 1.1130, hitting a fresh multi-month low. It then rebounded again, finding resistance around 1.1160. The pair remains under pressure amid a broad-based strong US Dollar.
The greenback strengthened sharply after the FOMC meeting. “Fed Chair Jerome Powell was quite hawkish during the press conference, which drove US yields higher, EUR/USD lower and US equities lower. We continue to see EUR/USD at 1.08 and expect dollar strength to broaden against other currencies during H1”, considered analysts at Danske Bank.
Economic data in the US came in mixed on Thursday. The first reading of Q4 US GDP showed activity expanded at a 6.9% annualized rate, above the 5.5% of market consensus. Initial Jobless Claims dropped to 260K in line with expectations. Durable Goods Orders dropped 0.9% in December (vs the 0.6% slide expected). Pending Home Sales fell 3.8% in December.
The economic figures have no impact on price actions as market participants continue to digest the FOMC meeting. The dollar remains firm even as US yields decline and stocks rebound on Thursday.
The EUR/USD is about to post the lowest daily close since June 2020. Despite falling 150 pips during the last 24 hours and showing oversold readings, no signs of a correction or stabilization are seen at the moment. Under 1.1130, the next support might be seen at 1.1105.
Technical levels