The EUR/USD pair halted its three-day losing streak, trading around 1.0920 during the Asian session on Friday. The positive momentum in the pair can be attributed to a weaker US Dollar and increased optimism in the market.
One of the factors contributing to the weaker US Dollar was the better-than-expected Initial Jobless Claims data, which came in at 233,000, below the forecast of 240,000. This news helped boost market sentiment and put pressure on the Greenback.
In addition, statements from Federal Reserve officials about the possibility of easing monetary policy further if inflation remains low also weighed on the US Dollar. The US Dollar Index (DXY) retraced some of its recent gains, trading around 103.20.
On the European front, traders are awaiting the release of Germany’s Harmonized Index of Consumer Prices (HICP) for July. Market expectations are for a steady increase of 2.6% year-on-year and 0.5% month-on-month.
Overall, the outlook for the EUR/USD pair remains positive as market sentiment improves and the US Dollar weakens. Traders will be closely watching economic data releases and central bank statements for further direction in the currency pair.
Analysis
In summary, the EUR/USD pair broke its losing streak as the US Dollar weakened and market sentiment improved. Positive data releases and dovish comments from central bank officials supported the Euro, while concerns about low inflation weighed on the US Dollar. Traders are now focused on upcoming economic data and central bank decisions for further cues on the currency pair’s direction.