During Thursday’s early Asian trading session, the EUR/USD pair experienced a notable ascent, surpassing the 1.0580 mark. This upward trajectory was primarily attributed to the US Dollar’s diminished strength following the Federal Open Market Committee (FOMC) meeting. The major currency pair is currently positioned around 1.0597, marking a 0.26% increase for the day.

The FOMC, as anticipated, maintained the federal funds rate at a steady 5.25–5.50% on Wednesday. Fed Chair Jerome Powell, in his press address, emphasized the need for a persistent rise in long-end yields, driven by higher-term premiums, to exert an influence on monetary policy. Powell acknowledged the current policy’s restrictive nature and hinted at the possibility of further rate hikes, albeit without apparent enthusiasm. Post-meeting, the Greenback witnessed a decline, with market sentiment suggesting the culmination of the rate hike cycle.

Data released on Wednesday indicated a modest uptick in US Private sector payroll growth for October, though it fell short of expectations. The JOLTS jobs opening figures unexpectedly surged, while the ISM Manufacturing PMI recorded its lowest since July.

Conversely, the European Central Bank (ECB) held interest rates constant last week and is anticipated to commence rate cuts in the next year’s second quarter. Disinflationary trends and PMI data signal elevated recession risks.

This week, preliminary Eurozone inflation data and GDP figures for the third quarter were released, both undershooting market forecasts.

Investors are poised to scrutinize upcoming data releases, including Germany’s Unemployment rate and manufacturing PMI from Spain and Italy. Additionally, remarks from ECB’s Lane and US employment data will provide further market direction.

EUR/USD Technical Outlook

Technical analysis of the EUR/USD pair reveals a halt in its decline at the 1.0515 level, followed by a bullish rebound testing the EMA50. Currently, the pair is trading above the support line of the bullish channel, presenting a conundrum between technical indicators that advocate a neutral stance until a clearer trend emerges.

Breach of the 1.0640 resistance may trigger a bullish correction targeting the 1.0760 region, while a dip below the 1.0575 support could signal a return to the primary bearish trend, potentially leading to an initial descent towards the 1.0450 level.