- EUR/USD looks to post losses for the second straight day on Thursday.
- Broad-based USD strength keeps bearish pressure on the pair intact.
- Eurozone and Germany GDP data will be published on Friday.
The EUR/USD pair staged a rebound during the American session but failed to hold above 1.0800. As of writing, the pair was down 0.3% on the day at 1.0783 and was looking to post its lowest daily close in three weeks.
The USD’s market valuation on Thursday seems to be the primary driver of EUR/USD’s action. Earlier in the day, US President Donald Trump said a strong dollar would be helpful during the recovery phase post-coronavirus. Additionally, the heavy bearish pressure surrounding major European equity indexes allowed the USD to continue to gather strength as a safe-haven.
Meanwhile, in its monthly Economic Bulletin, the ECB said the euro area GDP could contract by 5-12% in 2020 to further weigh on the shared currency.
Focus shift to Friday’s key macroeconomic data
In the second half of the day, the data from the US showed that Initial Jobless Claims fell to 2.9 million in the week ending May 8th but came in worse than the market expectation of 2.5 million. The US Dollar Index extended its daily rally after this data and touched a fresh 20-day high at 100.56. At the moment, the index is up 0.27% on a daily basis at 100.47.
On Friday, market participants will be paying close attention to the preliminary first-quarter GDP data from Germany and the eurozone. “EUR/USD has been leaning lower, and this trend may extend if Germany’s GDP misses expectations,” said NDDFX analyst Yohay Elam while previewing Friday’s key data releases. “The mix of weak eurozone data and a stronger dollar could push EUR/USD lower.”
Later in the day, the US economic docket will feature Retail Sales, Industrial Production data and the University of Michigan’s Consumer Sentiment Survey.
Technical levels to watch for