EURUSD slipped from recent peaks above 1.2260 to get back under the 1.2200 figure
Following yesterday’s gains, the dollar came back under the selling pressure on Thursday despite risk sentiment has deteriorated somehow, with investors being cautious ahead of fresh economic data out of the United States including the GDP, durable goods orders, pending home sales, and weekly jobless claims due later today.
The USD index faded the recent advance to challenge the 90.00 figure again while the US 10-year yields remain in sub-1.60% levels so far. In part, this is due to month-end adjustments in the dollar and the consolidative stance in US yields.
On Wednesday, the greenback derived support from the Federal Reserve. In particular, FOMC’s Quarles noted that medium-term inflation risks are weighted to the upside, but he also did not rule out start the debate around tapering in the next meetings. A hawkish hint was enough to make the dollar bounce from fresh multi-month lows. However, the US currency failed to preserve gains and retreated, staying bearish in general.
Anyway, EURUSD slipped from recent peaks above 1.2260 to get back under the 1.2200 figure. It looks like the pair would struggle to regain this level in the short term if the upcoming economic data out of the US surprises to the upside. In this scenario, dollar demand may reemerge, sending the common currency closer to a slightly ascending 20-DMA that arrives at 1.2135.
Meanwhile, the USDJPY pair has been rising for the third day in a row on Thursday. In recent trading, the pair exceeded the 20-DMA but is yet to confirm the latest breakout on a daily closing basis. In the immediate term, the prices need to stay above the 109.00 figure in order to extend the ascent towards the 109.80 target. On the downside, the key support is expected at 108.55.