EUR/USD dipped below the 10-day moving average Wednesday then bounced back above as bears seem to lack confidence to push the pair much lower despite fairly significant recent U.S. rate gains.
September 2023 SOFR futures prices SRAU3 peaked at 96.475 March 15 then struck a 1-month low of 95.075 Wednesday as hawkish Fed rhetoric drove investors to price out rate cuts later in 2023.
During that period EUR/USD hit a 1-year high and only pulled back to current levels over the most recent four sessions.
That price action should give longs confidence.
EUR/USD bears may lack conviction due to concerns with the U.S. jobs market.
WeeklyUSJOB=ECI and continuingUSJOBN=ECI claims are due Thursday.
Initial claims are expected to increase to 240k and continuing claims are expected to rise to 1.820m.
Initial claims have been trending higher since January while continuing claims has been trending upwards since May 2022.
Above-estimate results would indicate the U.S. job market could be softening which may lead the Fed to become less restrictive.
An acceleration in claims could spur a EUR/USD rally above 1.1075/1.1100.
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