EUR/USD Pulls Back as US Dollar Recovers Ahead of Jobless Claims Data

The EUR/USD pair rose for a third straight session on Thursday, buoyed by improved risk appetite amid renewed hopes for a peace deal in Ukraine. This optimism has outweighed disappointing economic data from Germany, while fresh concerns about a possible US economic slowdown continue to weigh on the US Dollar.

The Euro has extended its rebound from last week's dip below 1.1400, reaching the upper 1.1600s. At the time of writing, the pair is trading modestly higher at 1.1665 ahead of the U.S. trading session.

Support for the common currency was bolstered by news of a meeting between U.S. envoy Steve Witkoff and Russian President Vladimir Putin. The talks, reportedly welcomed by President Trump, have sparked speculation of an upcoming peace summit between Russia and Ukraine.

Meanwhile, the US Dollar remains under pressure. Recent macroeconomic data has reinforced expectations that the Federal Reserve could cut interest rates twice in the second half of the year, with a likely first move in September. Additionally, reports that President Trump may appoint loyalists to fill the vacant Federal Reserve Board seat—following the departure of Adriana Kugler—are raising concerns over the Fed's independence.

Looking ahead, market attention turns to Thursday’s US weekly Jobless Claims report. The data will be closely watched after last week’s Nonfarm Payrolls report revealed weaker-than-expected job creation, triggering a sharp pullback in the US Dollar.

Daily Market Movers: Risk Appetite Lifts Euro, US Dollar Pressured by Economic Concerns

• The Euro remains firm on Thursday, supported by improved market sentiment as hopes for a peace deal in Ukraine help offset disappointing Eurozone macroeconomic data and renewed trade tensions with the US. Meanwhile, the US Dollar continues to decline broadly as investors grow increasingly concerned about stagflation risks in the United States.

• The US Dollar remains vulnerable, with traders awaiting the weekly Jobless Claims report due later in the day. Expectations point to a slight increase of 3,000 claims, bringing the total to 221,000 for the final week of July. A weaker-than-expected result could exacerbate concerns about a softening labor market, adding further downside pressure on the Greenback.
• On Wednesday, Federal Reserve officials Susan Collins (Boston Fed) and Lisa Cook (Board of Governors) warned of the economic risks associated with ongoing policy uncertainty. Both highlighted that new trade tariffs could push inflation higher while dampening hiring — remarks that offered no support for the US Dollar.
• Compounding these worries, US President Donald Trump issued fresh threats on global trade, proposing a 100% tariff on foreign-made semiconductors, a 25% tariff on India in retaliation for Russian oil purchases, and hinted at additional sanctions against China.
• In the Eurozone, German Industrial Production posted a sharp 1.9% decline in June, missing market expectations of a 0.5% drop and following a modest 0.1% decrease in May. Trade data also disappointed, with Germany's trade surplus narrowing to EUR 14.9 billion in June, down from EUR 18.6 billion in May and below the EUR 17.3 billion forecast.
• Despite these downbeat figures, the Euro has remained resilient. Optimism surrounding diplomatic progress in Ukraine continues to support risk sentiment, allowing the common currency to shrug off weaker domestic fundamentals.

Technical Analysis: EUR/USD Bulls Regain Control

EUR/USD is gaining bullish momentum after breaking through key resistance at 1.1600. The pair is currently trading near 1.1665, with the daily Relative Strength Index (RSI) moving above the neutral 50.0 level, signaling continued upside potential. On the 4-hour chart, the RSI is approaching overbought territory, but further gains are still likely—especially if US labor market data disappoints.

Upside Targets:

• Immediate resistance lies in the 1.1700–1.1710 zone, where the 78.6% Fibonacci retracement of the late-July decline aligns with the lows from July 23 and 25.

• Above that, trendline resistance at 1.1745 could act as a barrier.

• A breakout beyond this region would bring the July 24 high at 1.1790 into view.

Downside Levels to Watch:

• Initial support is found at the former resistance around 1.1590 (highs from August 3 and 4).

• Further support lies at 1.1530 (August 5 low), followed by 1.1460 (July 31 high) and 1.1400 (August 1 low).