EURUSD managed to attract some demand around 1.11 on Thursday and finished with marginal gains. The central bank left the key rates unchanged and the accompanying statement was rather dovish but Draghi’s speech was more neutral as the central bank governor pointed to “pretty low” recessionary risks and noted that the governing council should assess fresh forecasts and data before taking decision on additional stimulus. As a result, EURUSD recouped losses and finished around 1.1140.
Now, market focus shifts to the upcoming US GDP data which will affect the USD pairs. If the release exceeds forecasts and cools Fed rate cut expectations, the greenback will appreciate across the board. Despite a rate cut next week is largely a done deal, traders show a vivid reaction to the incoming data from the US as each strong report cools down dovish expectations in the markets.
Technically, the 1.11 support area remains vulnerable. The near-term technical outlook for the pair has worsened substantially after a break below the 1.12 handle which served as a decent support before. So any uptick in USD demand could trigger another sell-off in the common currency. The immediate resistance now comes around 1.1155.