EUR/USD keeps red around 1.0700 handle after US economic releases

After once again failing to clear 1.0770 hurdle, the EUR/USD pair lost ground and slipped below below 1.0700 handle.

The selling pressure, however, abated following the US economic releases that showed weekly jobless claims for the week ended Jan. 20 rose more-than-expected to 259K as compared to 247K expected and 234K reported in the previous week. Meanwhile, the US trade balance for December came-in to show a deficit of $65 billion, matching previous month’s $65 billion. 

Today’s economic data failed to provided an additional boost to the greenback’s recovery move, albeit the key US Dollar Index held on to its recovery gains from 7-week lows to currently hovering around session tops near 100.35 region. The pair was last seen trading around 1.0705 level, within striking distance of 4-day low touched in the past hour.

Adding to this, dovish comments from ECB's Villeroy, saying that Euro-zone recovery is not yet satisfactory, also collaborated to some renewed selling pressure around the major. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "From a technical point of view, the pair maintains the neutral-to-bullish bias, as despite technical indicators lack directional strength around their mid-lines, the moving averages keep heading north, whilst the price stands above the key Fibonacci support at 1.0710. As commented on previous updates, it will take a downward acceleration below this level to see the pair extending its decline down to 1.0660 first, and towards 1.0620 later on the day."

She further writes, "The upside continues to be capped by a bearish 100 SMA at 1.0770, the level to surpass with momentum to confirm an upward continuation towards the 1.0800/40 price zone."