EUR/USD analysis: technically bearish, US GDP to set the trend

EUR/USD Current price: 1.0887

The American dollar resumed its advance during the US session this Thursday, edging higher against all of its major rivals. The EUR/USD pair advanced intraday up to 1.0940, but ended the day below the 1.0900 level, not far from a daily low of 1.0882. The first series of US data was soft, with orders for capital goods declining by the most since February. Durable Goods Orders fell by 0.1% in September, against an advance of 0.1% expected, while the core reading, ex transportation, rose by 0.2% as expected.  Jobless claims for the week ending October 21st were of 258K,  slightly above expected,  but holding near a multi-decade low. The dollar picked up momentum after the release of September Pending home sales that grew 1.5% when compared to August, and by 2.4% when compared to September 2015.

The US will release its first estimate of Q3 GDP on Friday, expected at 2.5% from previous quarter 1.4%, and the market will probably wait for the figure to decide whether or not to send the EUR/USD pair to fresh multi-month lows. Technically, the pair has pared gains once again a few pips below 1.0950, the 23.6% retracement of the latest bearish run between 1.1278 and 1.0850, the low set this week,  preserving the dominant bearish trend. The 38.2% retracement of the same decline stands at 1.1010, and it will take a break above this last to consider an upward continuation. In the meantime, the 4 hours chart shows that the price is breaking below its 20 SMA, while technical indicators have turned sharply lower, with the RSI indicator already within bearish territory, all of which supports a new leg lower for this Friday.

Support levels: 1.0840 1.0800 1.0760                                  

Resistance levels: 1.0910 1.0950 1.1010

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