EUR/USD bears pierce 1.1200 after US Jobless Claims and PCE

• EUR/USD reached a new 16-month low at 1.1185, though it found strong support, reclaiming the 1.1200 figure.
• US Dollar Index retreated once the PCE was released, down from 96.93 to 96.85.
• EUR/USD: Failure to hold above 1.1200 would expose May 2020 support around 1.1018.

The shared currency cannot recover from three weeks in a row loss, declines some 0.49%, trading at 1.1195 during the New York session at the time of writing. A packed Wednesday’s of US economic data ahead of Thanksgiving keeps EUR/USD traders in front of the screen longer than expected. Further, a risk-off market sentiment keeps the greenback firmly bid, with the US Dollar Index near the 97.00 figure, reaching a new 16-month high for the third time in the week.

US Initial Jobless Claims increase below the 200K figure, boosts the greenback

On Wednesday, earlier In the American session, a full US macroeconomic docket unveiled the US Initial Jobless Claims, Durable Goods data, and GDP figures. The Initial Jobless Claims for the week ending on November 10 rose to 199K, lower than the 260K foreseen by analysts. 

Moreover, in a month-over-month reading, the Durable Good Orders for October fell 0.5% more than the 0.4% contraction expected by analysts. Excluding transportation, orders rose more than expectations, up to 0.5% vs. 0.2%, for the same period. Further, the US GDP for Q3 grew by 2.1%. In line with market participants’ expectations.

Meanwhile, the Federal Reserve’s favorite gauge for inflation, the Personal Consumption Expenditure (PCE) Price Index, rose to 4.1% YoY in October, the US Bureau of Economic Analysis reported on Wednesday. That was in line with the median economist forecasts and confirmed a 0.4% rise from last month’s upwardly revised reading of 3.7%.

EUR/USD Price Forecast: Technical outlook

The daily chart depicts a strong downtrend on the EUR/USD pair. It is worth noting that despite the daily moving averages (DMA’s) still residing above the spot price, the downward move seems to be overextended. Though aiming higher, the Relative Strength Index (RSI) is located in oversold conditions at 26, indicating that the pair might be due to a future correction.

In the outcome of extending the downward move, the first support level would be the 1.1100 figure. A breach of the abovementioned would expose the May 1, 2020, cycle high-turned support at 1.1018, followed by the May 25, 2020, swing low at 1.0870.

On the other hand, if EUR bulls hold the 1.1200 figure, the 1.1300 figure would be the first resistance. A break of the latter would expose the November 18 swing high at 1.1374.