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EUR/USD advances during the North American on Thursday up 0.41% after the Fed decided to cut rates, alongside the release of weaker than expected job data in the United States (US). At the time of writing, the pair trades at 1.1742 after bouncing off daily lows of 1.1682.

Euro strengthens after a dovish Fed and weaker US labor figures deepen expectations of further policy easing

US economic data was mixed as the number of Americans filling for unemployment benefits rose, an indication of weakness in the jobs market. Later, the trade deficit narrowed in September, via the US Census Bureau.

On Wednesday, the Federal Reserve cut rates by 25 basis points to 3.50%-3.75%, yet most officials in the dot-plot showed that the median were expecting the Fed funds rate to end at a higher level. Meanwhile, the Fed Chair Jerome Powell hinted that Fed is “well positioned to determine the extent and timing of additional adjustments to out policy rate based on the incoming data, the evolving outlook and the balance of risks.”

This week, the US economic docket will feature Fed speakers, led by Philadelphia’s Fed Anna Paulson, Cleveland’s Fed Beth Hammack and Chicago’s Austan Goolsbee.

Across the pond, the Eurozone schedule was empty, yet European Central Bank (ECB) President Christine Lagarde said that policy is in a good place ant that the bank could update its projections in December.

Daily digest market movers: EUR/USD boosted by US Dollar weakness

• The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, is down 0.29% at 98.34 as the Dollar selloff extends following the Fed’s decision.
• US Initial Jobless Claims for the week ending December 6 increased by 236K, exceeding the previous week’s upwardly revised 192K, according to the Department of Labor. In contrast, Continuing Claims for the week ending November 29 fell to 1.838 million from 1.937 million, suggesting some stabilization in longer-term unemployment.
• The US Goods and Services Trade Balance narrowed to –$52.8 billion in September, improving from –$59.3 billion in August and outperforming expectations for a widening deficit toward –$63.3 billion.
• On Wednesday, the Fed Chair Powell stated that the central bank is “well positioned” to “wait and see” how the economy develops, following a total easing of 75 basis points this year. He mentioned that the Fed funds rate is near the upper end of estimates for neutrality and that they will await economic data, which may be “distorted.”
• In Europe, Portugal’s former central-bank Governor Mario Centeno emerged as a potential contender to become the ECB’s next Vice-President succeeding the Spanish Luis De Guindo whose term is expiring in May 2026.

Technical analysis: EUR/USD surpasses 1.1700, eyes on 1.1750

EUR/USD finally cleared the top of the 1.1600-1.1650 range, extending its gains past 1.1700 with traders eyeing the 1.1800 figure. Bullish momentum has increased as depicted by the Relative Strength Index (RSI), an indication that further upside is seen.

Conversely, if EUR/USD slides below 1.1700, sellers could opt to send prices towards the 100-day Simple Moving Average (SMA) at 1.1641 ahead of 1.1600.

(Click on image to enlarge)

EUR/USD daily chart

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