EUR/USD Rejects Weekly Downside Support

It has been a big day on the economic calendar, featuring a collection of primary market drivers. Unfortunately for the Greenback, the reports didn’t come in overly positive. As a result, the USD is off vs the majors. For the EUR/USD, the past 24-hour news cycle has driven a hard test and rejection of a key downside support area.

During the U.S. premarket hours, several important metrics were released to the public. Here’s a quick look at the highlights:

Event                                                                  Actual                 Projected          Previous

Continuing Jobless Claims (Jan. 16)               4.771M                  5.054M              4.974M

Initial Jobless Claims (Jan. 23)                           847K                       875K                  914K

Core PCE Prices QoQ (Q4)                                   1.4%                     1.5%                  3.4%

GDP QoQ (Q4)                                                      4.0%                       4.0%                33.4%                

In short, economic activity slowed in Q4 2020 and inflation ticked significantly lower. However, today’s Jobless Claims figures did improve week-over-week, suggesting that Q1 2021 is likely to produce a much stronger GDP figure. As always, the COVID-19 pandemic and new variants are adding to aggregate market uncertainty. 

Let’s take a look at the weekly chart for the EUR/USD and see how this market is faring.

EUR/USD Rejects Weekly Downside Support

In a Live Market Update from Monday, I issued a buy recommendation for the EUR/USD. The trade turned out to be a breakaway winner, posting 50 pips profit. If you got in the action, well done!

Overview: As of now, a bullish bias is warranted toward the EUR/USD. Yesterday’s Fed Announcements stated that more QE is on the way for the intermediate future. Given a weaker-than-expected Q4 2020, it’s going to take some time for the Greenback to regain 2019 and early-2020’s swagger.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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