The EUR/USD currency pair is currently trading in a narrow range below the 1.1700 mark, sitting at around 1.1680 as of this moment. There was an unexpected drop in the unemployment rate across the eurozone, along with some positive business confidence indicators, but these have only had a minor effect on the euro’s movement.
On the U.S. side, data released Wednesday presented a mixed bag, leaving no clear indication about the Federal Reserve’s monetary policy direction. Employment figures painted a picture of stagnation in the labor market, but a favorable service sector report hinted at a potential economic rebound in late 2025.
Upcoming U.S. weekly unemployment claims and non-farm productivity data expected on Thursday might give further insight into the dollar’s performance. Still, many investors may prefer to wait for the December non-farm payrolls report set to come out on Friday.
Market Movements: Euro Unimpressed by Positive Eurozone Data
- New data from Thursday indicated a decrease in the eurozone unemployment rate, dropping to 6.3% in November from 6.4% in October, which was surprising given the expectation that it would hold steady.
- The producer price index (PPI) experienced an increase to 0.5% from 0.1% in October, surpassing the expected 0.2% rise. However, year-on-year, producer prices contracted by 1.7%, which is a slower drop than the anticipated -1.9%.
- Business confidence metrics from the European Commission also showed stronger results than expected. For instance, consumer confidence rose to -13.1 from -14.6, business climate improved from -0.66 to -0.56, and industrial sentiment increased to -9 from -9.3 the previous month.
- German data earlier indicated factory orders surged by 5.6% in November, following a 1.6% rise in October, which was better than the forecasted decline of 1%.
- In contrast, U.S. data from Wednesday didn’t shed much light on the Fed’s future monetary moves. According to the ADP employment report, net job growth in December was lower than anticipated at 41,000 compared to the expected 47,000, and a previous loss in November was adjusted downward.
- The number of job openings fell too, according to the JOLTS report, dropping to 7.1 million in November, which is below the estimate of 7.6 million and less than the revised figure of 7.449 million for October.
- Weekly U.S. jobless claims are projected to have climbed to 210,000 during the last week of December, up from 199,000, but with the non-farm payrolls report approaching, these figures may have a limited impact.
Technical Analysis: EUR/USD in a Bearish Correction
The downward trend in the EUR/USD pair from the recent high of 1.1808 continues, with support being found at around 1.1660. The indicators on the 4-hour chart are showing slightly negative signals; the MACD histogram is near the zero mark, indicating a lack of momentum, while the RSI is flattening below 40.
Additionally, the low of 1.1659 from January 5 is close to the lows of December 8 and 9, which were around 1.1615. Meanwhile, upward movements might find resistance near Wednesday’s high of 1.1700. If the price rallies, the next significant targets are the descending trendline from the December peak of 1.1725 and Tuesday’s high of 1.1740.
