EUR/USD drops below 1.1170, looks to snap 7-day winning streak
- Broad USD recovery weighs on EUR/USD on Thursday.
- US Dollar Index adds 0.4% after pre-New Year drop.
- Activity in US' manufacturing sector continued to expand at modest pace in December.
After advancing to its highest level since early August at 1.1241 ahead of the New Year break, the EUR/USD pair reversed its direction on Thursday with the greenback starting 2020 on a strong footing. As of writing, the pair was down 0.4% on the day at 1.1165.
USD outperforms its rivals
The USD market valuation on Thursday seems to be driving the pair's action. The US Dollar Index, which tracks the USD's value against a basket of six major currencies, lost more than 1% in the last week of December pressured by the year-end flows. Following this drop, the index is staging a decisive recovery and was last up 0.43% on the day at 96.86.
Earlier in the day, the data published by the IHS Markit showed that the economic activity in Germany's and the euro area's manufacturing sector continued to contract in December, albeit at a softer pace than November.
On the other hand, weekly Jobless Claims in the US came in at 222K in the week ending December 27th to beat the market expectation of 225K and the Markit Manufacturing PMI arrived at 52.4 in December's final reading to show ongoing expansion in the sector.
Friday's economic calendar will feature the Unemployment Rate and Consumer Price Index (CPI) data from Germany before the ISM publishes the US Manufacturing PMI during the American trading hours.
Technical levels to watch for