EUR/USD eking out a small gain in quiet Thursday trading

• The Euro is pushing slightly higher against the US Dollar on Thursday.
• A dovish ECB and shuttered US holiday markets are capping momentum.
• The EUR is up about 0.15% against the USD for Thursday following mixed releases.

The EUR/USD is drifting into the high side on Thursday, tapping an early high for the day of 1.0930 and the pair is now waffling into the 1.0900 handle as thin trading volumes drain market momentum.

US markets are dark for the Thanksgiving holiday with banks and market participants alike taking the day off before returning to close out the week on Friday with a limited schedule.

Eurozone Preliminary Manufacturing PMI improves to 43.8 in November vs. 43.4 expected

The Euro (EUR) caught a bid in early Thursday trading after pan-European Purchasing Managers’ Index (PMI) came in broadly above-expectations, but the European Central Bank’s (ECB) latest Monetary Policy Meeting Accounts (a more informal reading of the ECB’s internal policy dialogue) reveals the ECB remains uneasy about the inflationary and economic outlook for the Eurozone.

ECB Accounts: Uncertainty surrounding the economic outlook had increased

Eurozone PMIs beat the street across the board, printing above expectations, but bulls were ultimately limited as European PMIs continue to print in sub-50.0 territory. Overall purchasing manager sentiment is slowly improving from recent lows, but meaningful activity expansion remains elusive for the Eurozone’s broader economy.

The Eurozone’s HCOB Manufacturing PMI ticked up to 43.8 against the forecast 43.8 compared to October’s 43.1. The Services PMI component saw only a minor improvement, from October’s 47.8 to 48.2, while markets were anticipating a print of 48.1.

The Eurozone HCOB Composite PMI printed at 47.1 for November, a step higher than the forecast 46.9 and clawing back some ground from October’s 46.5.

Inflation continues to cool in the Eurozone, but the ECB remains concerned about stubborn price growth that is receding much slower than ECB policymakers would like. Economic uncertainty continues to plague the Eurozone, and the ECB noted that downside risks have increased since their last major check-in in September.

With prices still running on the hot side, the ECB currently doesn’t expect inflation to return to the central bank’s 2% target until sometime in 2025, and investors will have to grapple with not seeing interest rate cuts for some time to come.

EUR/USD Technical Outlook

The Euro’s travels across the charts this week have been marred with back-and-forth action, and Thursday sees the EUR/USD getting hung up on the 50-hour Simple Moving Average (SMA) as the pair grapples with thin holiday trading.

Daily candlesticks have the pair trading just north of the 200-day SMA at the 1.0800 handle, but technical resistance is forming at the 1.0950 level as bulls struggle to make a clean break of the week’s highs.

EUR/USD Hourly Chart

EUR/USD Daily Chart