EUR/USD rises to six-day highs above 1.0770 as USD weakens after US data

• US Jobless Claims unexpectedly jump to the highest level since October 2021.
• The US Dollar weakens across the board after the data, with the DXY dropping below 103.50.
• The EUR/USD is moving towards last week's high, approaching 1.0800.

The EUR/USD accelerated to the upside following the release of employment data from the US. The pair is trading at 1.0770/75, the highest level since last Friday, supported by a slide of the US Dollar across the board.

Bad news for the Dollar

"The Labor Department's weekly report showed that Initial Jobless Claims jumped to 261K in the week ended June 3, which was above market expectations of 235K. It is the highest level since October 2021. The US Dollar weakened further after the data, falling to fresh daily lows against most of its rivals and US yield turned to the downside. The DXY tumbled to test weekly lows under 103.40. 

The employment figures eased expectations about a potential rate hike from the Federal Reserve next week. The FOMC will announce its decision on Wednesday, and the consensus is for the Fed to keep rates unchanged.

Earlier on Thursday, data from Eurostat showed that the Eurozone economy contracted 0.1% during the first quarter, revised from 0.0%. Next Thursday, the European Central Bank (ECB) is expected to announce a rate hike, despite weak activity figures. As ECB President Lagarde said, inflation remains too elevated, in line with comments from other members of the Governing Council. 

EUR/USD moving away from 1.0700

During the last few days, the EUR/USD has been unable to sustainably move away from the 1.0700 level. However, on Thursday, the pair appears to be breaking to the upside. Euro's momentum seems strong, and the pair is about to test last week's highs around 1.0780. Above that level, attention would turn to 1.0800/05.

The immediate support is now seen around 1.0740, followed by the 1.0700/05 area, which contains the 20-period Simple Moving Average (SMA) in the 4-hour chart. A slide below this level would negate the current bullish bias in the short term.

Technical levels