EUR/USD pares majority of daily gains, trades around 1.2120
- EUR/USD lost its traction after rising to 1.2149 on Thursday.
- US Dollar Index looks to close the day little changed.
- Weekly Initial Jobless Claims fell less than expected last week.
The EUR/USD pair gained traction in the early trading hours of the American session and climbed to a nine-day high of 1.2149. However, the pair struggled to preserve its bullish momentum and erased a large portion of its daily gains. As of writing, EUR/USD was up 0.08% on a daily basis at 1.2125.
Rising US T-bond yields support USD
The data published by the US Department of Labor showed on Thursday that the weekly Initial Jobless Claims in the US declined by 19,000 to 793,000 but came in worse than the market consensus of 757,000. Although the US Dollar Index dropped to a session low of 90.26 after this data, a sharp rebound witnessed in the US Treasury bond yields provided a boost to the USD. At the moment, the 10-year US T-bond yield is up 2.75% on the day and the DXY is posting small daily gains at 90.44.
On the other hand, the European Commission's latest monthly report revealed on Thursday that the eurozone growth forecast for 2021 got revised down to 3.8% from 4.2% in the previous report. "The near-term outlook for the European economy looks weaker than expected last autumn, as the pandemic has tightened its grip on the continent," the Commission noted in its publication
Meanwhile, European Central Bank (ECB) policymaker Gabriel Makhlouf acknowledged that the global economic outlook has deteriorated in the near term and added that it's not the right time to unwind either fiscal or monetary support.
There won't be any significant macroeconomic data releases featured in the European economic docket on Friday and the USD's market valuation is likely to continue to drive EUR/USD's movements.
Technical levels to watch for