EUR/USD recovers back above 1.14, still down on day

Following a retreat to 1.1380 area, the EUR/USD pair slowly erased a portion of its losses to reach the 1.14 handle once again. As of writing, the pair was trading at 1.1401, losing 0.09% on the day.

With today's drop, the pair retraced all of the earnings from the first half of the week to turn flat on a weekly basis. Although the US Dollar Index is having a difficult time gathering momentum amid continuous dovish comments from Fed speakers, the pair is failing to take advantage of that situation as the euro is struggling to find demand. The sharp drop witnessed in the EUR/GBP pair seems to be the main reason behind the euro weakness. In fact, the Euro Index is down 0.2% on the day.

FOMC Chairwoman Janet Yellen didn't offer anything that the markets already haven't heard in her statement today. Furthermore, in a published essay on Thursday, Dallas Federal Reserve Bank President Robert Kaplan argued that they would need to see more evidence of inflation moving towards the Fed's target rate of 2% before making any further policy moves. Nevertheless, the US Dollar Index is moving virtually unchanged around the mid-95s.

• Fed's Kaplan: Future removal of accommodation should be done patiently, gradually

The only data due from the EU will be the trade balance numbers for May, which is expected to rise to a seasonally adjusted level of €20.3B from €19.6B. Later in the day, investors will look upon the CPI figures from the United States for fresh trading opportunities. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "...the 4 hours chart shows that the price settled below a flat 20 SMA, whilst the Momentum indicator hovers around its mid-line and the RSI indicator turned marginally lower around 45, not enough to confirm additional slides ahead. The same chart shows that a daily ascendant trend line converges with a bullish 100 SMA around 1.1340, a strong support that once broken will open doors for a steeper decline that will turn into a bearish movement only on an extension below 1.1290."

According to the analyst, technical supports for the pair could be seen at 1.1340, 1.1290 and 1.1250 while short-term resistances align at 1.1420, 1.1460 and 1.1490. 

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