EUR/USD stays firm near the 1.1500 handle on US data

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  • The pair keeps the bid tone intact in the 1.1500 area.
  • The greenback is unable to shrug off Fed-led weakness.
  • US Initial Claims shoot to 253K WoW.

The bid tone around the shared currency remains intact on Thursday, with EUR/USD managing to keep daily gains and business around 1.1500 the figure.

EUR/USD gains capped by Fibo retracement

The pair is trading in the positive territory since last Friday, managing to gain around 2 cents since the ECB-sponsored sell-off sent it to fresh 2019 lows in the 1.1290/85 band.

The upbeat sentiment around spot has been reinforced in past hours in response to the dovish tone from the FOMC, which now sees the Federal Reserve shifting to a neutral stance and more data-dependent.

In addition, news of a potential meeting between Trump and Xi Jinping in February has been also fuelling speculations over a probable trade deal and is also keeping the buck under pressure.

In the data space, EMU’s flash Q4 GDP figures came in at 0.2% QoQ and 1.2% YoY, in line with prior surveys. Across the pond, Initial Claims jumped 253K WoW although largely due to the US shutdown. Further US data saw the Employment Cost Index (ECI) at 0.7% in Q4, a tad below estimates.

What to look for around EUR/USD

USD-dynamics will drive the sentiment in the pair in the very near term, showing some upside potential in response to the now neutral stance from the Federal Reserve. However, fundamentals in the euro region are not something to write home about and this carries the potential to weigh on the single currency in the next months. Politics in Euroland will also be a factor to have in mind, with EU parliamentary elections coming up in May and investors closely following the social scenario in France and populist developments in Italy.

EUR/USD levels to watch

At the moment, the pair is gaining 0.19% at 1.1491 facing the next up barrier at 1.1514 (high Jan.31) seconded by 1.1515 (50% Fibo of the September-November drop) and finally 1.1569 (2019 high Jan.9). On the flip side, a breakdown of 1.1446 (100-day SMA) would target 1.1388 (55-day SMA) en route to 1.1323 (200-week SMA).