EUR/USD holds tepid recovery gains after US economic releases

Having spiked to three day high near 1.0470 level, the EUR/USD pair trimmed some its daily gains after upward revision of US Q3 GDP growth. 

Currently trading around 1.0450 level, with only moderate gains, the pair witnessed some renewed selling pressure after the final print of the US GDP for Q3 2016 was revised higher to show economy grew at 3.5% annualized pace. The reading was better-than 3.3% expected and 3.2% reported previously.

The upbeat GDP print, however, got negated by a sharp decline in durable goods orders. In fact, durable goods orders reversed all of its previous month’s gains and contracted by 4.6%, which was marginally better-than 4.7% contraction expected. 

Meanwhile, weekly jobless claims unexpectedly rose by 21K to 275K for week ended Dec. 16. Consensus expectations were pointing to a rise by 2K to 256K. 

Today’s economic data did little to provide an additional boost to the already stronger US Dollar, but was good enough to halt further corrective slide and halt the pair’s tepid recovery move. 

Next on tap would be the Fed’s preferred inflation gauge – core PCE price index, but is unlikely to provide any fresh impetus amid relatively quiet trading session ahead of year-end holiday season. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "As for the technical picture, the EUR/USD pair has made little progress, with the 4 hours chart showing the price a few pips above a horizontal 20 SMA and the Momentum indicator heading nowhere around its mid-line. The RSI indicator however, support some further gains, heading higher around 53."

She further adds, "Friday's high at 1.0480 is the immediate resistance, and the level to surpass to see the pair extending its gains further, up to the 1.0520/40 region. The 1.0420 level is the first intraday support, followed by 1.0390. It would take a break below this last to see the pair resuming its slide towards the year low of 1.0352."