Technical Bias: Slightly Bullish
- EURUSD eases off 2-month high of 1.1255; consolidates in the low-to-mid 1.11 region.
- Eurozone CPI flat in April, preliminary data show.
- US initial jobless claims fall to 15-year low last week.
The EURUSD was little changed in the early New York session after surging to a new two-month high, as the markets reacted to mixed US data.
The EURUSD rose above 1.12 for the first time since late-February, advancing more than 100 pips to 1.1255. The pair would subsequently consolidate at 1.1138, advancing 0.2 percent. The EURUSD faces near-term resistance at 1.1243, the high from February 27. Immediate support is located at 1.1120.
The 19-member Eurozone finally exited deflation in April, raising cautious optimism about the region’s recovery. The consumer price index (CPI) of goods and services was flat in the 12 months through April after declining 0.1 percent the previous month. Core CPI, which excludes food and energy, rose 0.6 percent annually, unchanged from March.
Separately, Eurozone unemployment was unchanged in March at 11.3 percent. A median estimate of economists forecast a drop to 11.2 percent.
US personal income was unexpectedly flat in March, while personal spending continued to increase, the Commerce Department reported on Thursday. Personal spending rose 0.4 percent in March, slightly below forecasts.
PCE inflation – the Federal Reserve’s preferred measure of inflation – edged lower to 1.3 percent in March from 1.4 percent.
Separately, initial jobless claims fell to a fresh 15-year low last week, a sign the labour market recovery was still on track after hitting a soft patch. Jobless claims fell by 34,000 to 262,000 in the week ending April 25, the lowest level since April 2000. Continuing jobless claims also fell by 74,000 to the lowest level since December 2000.