- The EUR/USD has increased by 0.43%, as traders downplay US GDP and unemployment claims while grappling with some confusion surrounding FRED.
- As traders assess, Trump and Safehaven will shift towards the Euro, Yen, and Swiss francs, gauging the US dollar’s momentum.
- With the French confidence vote on the horizon, the stability of the euro is in question, especially as ECB minutes and sentiment data reveal a precarious outlook.
In Thursday’s North American trading session, the EUR/USD is set to make an appearance, as the US dollar struggles to find support despite positive US data. Currently, the pair is at 1.1688, reflecting a 0.43% rise.
Traders are still preoccupied with the dynamics between the Fed and the White House, as the latest GDP data and initial unemployment claims indicate a solid economy. Consequently, the Greenback has weakened for the third consecutive day, with safety-seeking traders turning to the euro, Swiss franc (CHF), and Japanese yen (JPY).
However, the euro’s gains may be temporary as French Prime Minister Bailloux is calling for votes of confidence amid budget deficits, raising fears of potential dismissal.
Upcoming European economic data includes the final meeting of the European Central Bank (ECB), sentiment indicators for August, and consumer confidence minutes from the same period.
On Friday, the US will unveil the Core Personal Consumption Expenditure (PCE) Price Index, which is the Fed’s key inflation measure.
Daily Digest Market Movers: Strong US GDP data overlooked as euro gains strength
- The US Economic Docket revealed a stronger-than-expected growth rate of 3.3% for the second quarter of 2025, surpassing the forecasted 3.0%. Market expectations hovered above 3.1%.
- Unemployment claims for the week ending August 23rd dipped to 229K from 234K, barely missing the 230K prediction. Still, earlier revisions of non-farm payroll data indicate a cooled labor market, with an average of just 35,000 jobs added over the past three months.
- The US Dollar Index (DXY), which tracks the dollar against a basket of six currencies, has fallen by 0.33% to 97.85.
- Recent ECB minutes indicate the central bank is in a standby mode. Concerns around “escalation of global trade tensions” have raised risks for the economy. They also highlighted extensive discussions about the significant uncertainties tied to trade policy and geopolitics.
- Expectations are rising that the Fed may lower rates in September. The Prime Marketer’s Terminal Interest Rate Probability Tool indicates probabilities of 4.00%-4.25% from a 25 basis point cut in the Fed’s easing policy, while the ECB seems poised to hold rates steady with only a 6% chance of a 25bps cut.
Technical Outlook: EUR/USD may challenge 1.1700 soon
The upward movement of EUR/USD remains strong, with prices exceeding 1.1600 and nearing a three-day peak of almost 1.1700. It’s interesting that the previously bearish relative strength index (RSI) has bounced back into bullish territory, suggesting buyers are taking control.
Daily closes above 1.1700 would reinforce the case for moving to higher levels. Next targets could include the year-to-date peak of 1.1742 and highs of 1.1800 and 1.1829 seen on August 22nd.
If it breaks below the 50-day SMA at 1.1658, it could expose the 20-day SMA around 1.1645, followed by the 100-day SMA near 1.1506.
