EUR/USD Update: Market Sentiment Shifts Amid Positive U.S. Economic Data

EUR/USD pared some of its gains after upbeat U.S. economic data, recovering sharply on positive market sentiment. It hit a high of 1.05780 at the time of writing and is currently trading around 1.05376.

U.S. Economic Growth Highlights

The U.S. economy grew at an annualized rate of 2.8% in the third quarter of 2024, according to the Bureau of Economic Analysis, which is slightly lower than the previous quarter's growth of 3.0%. Core durable goods orders, excluding transportation items, increased by 0.6% in October, showing ongoing strength in business investment and consumer demand. Additionally, the latest jobless claims data reported a decrease in initial claims for unemployment benefits to 210,000, suggesting a tightening labor market. This means employers are keeping their workers during uncertain economic times. Overall, these indicators reflect a stable economic environment with positive signs for growth.

Technical Analysis Overview

The pair remained above both short-term (34 and 55-4H EMA) and long-term (200-4H MA) moving averages.

Resistance and Support Levels

Resistance Levels: Near-term resistance is at 1.060. A breakout above this could push the pair towards targets at 1.0660/1.070/1.0760/$1.0835, and possibly 1.0900. Major bullish momentum is expected only if prices surpass 1.1000, which would open the door to 1.1070 and 1.1150.
Support Levels: Immediate support is at 1.0490. A drop below this could lead to further declines to 1.0435/1.0400/1.0370/1.0330/1.0240.

Indicator Insights

Indicator Insights (4-Hour Chart): The Commodity Channel Index (CCI) indicates a bullish trend, while the Average Directional Movement Index (ADX) suggests a neutral outlook.

Suggested Trading Strategy

Given the weak sentiment in technical indicators, a sensible strategy would be to sell on rallies around the 1.0570 mark, with a stop-loss at 1.0600 and a target price of 1.04560 for potential gains.