The greenback weakened on Thursday as risk appetite returns to the market after major oil producers, in a meeting in Algeria on Wednesday, reached to a consensus that a production cut was needed to lift crude oil prices and agreed on a deal to cap oil output. The GBP/USD pair jumped to four-day high level of 1.3058, albeit has reversed majority of its gains from session peak, while the EUR/USD pair traded firm above 1.1200 handle.

Investors on Wednesday also focused on commentary from various Fed officials, which failed to move market expectations of a possible Fed rate-hike action in December and had a little impact on the US Dollar. On the economic data front, US monthly durable goods orders data flattened out in August but failed to provide any impetus in the FX market.

Today's economic data features the release of German employment change and prelim CPI print, scheduled for release during European session, while from the US the final growth figure for the second quarter of 2016 will catch the spotlight during NA trading session. Trader on Thursday will also confront the release of weekly unemployment claims and pending home sales data from the US.

Technical outlook

GBP/USD

As was expected yesterday, the pair is confronting strong hurdle at the short-term descending trend-channel formation on 4-hourly chart. With technical indicators heading towards bullish territory, a follow through US Dollar selling should now assist the pair to break through the trend-channel resistance. However, it would be prudent to wait for a decisive break through this important resistance before confirming extension of the pair’s near-term recovery trend.

From current levels, 1.3050-55 region (the descending trend-channel resistance) remains immediate barrier, which if conquered seems to lift the pair immediately towards 1.3085-90 resistance area before the pair darts through 1.3100 handle and head towards testing its next major resistance near 1.3165 level.

On the downside, 1.3000 psychological mark now becomes immediate support to defend. Renewed selling pressure back below this immediate support, leading to a subsequent drop below 1.2980 (yesterday’s low), would negate the bullish expectations and drag the pair immediately towards an ascending trend-line support near 1.2945-40 region. A convincing break below the trend-line support would now turn the pair vulnerable to continue extend its downward trajectory in the near-term towards testing the descending trend-channel support near 1.2800 handle.

EUR/USD

The pair continues to hold and rebound from 100-day SMA support but has been confined within a near-term trading range. Hence, a follow through up-move beyond 1.1250 resistance might continue to confront strong resistance near 1.1275-80 region. However, should the pair managed to decisively strengthen above this 1.1275-80 strong hurdle, a fresh bout of short-covering is likely to lift the pair beyond 1.1300 round figure mark towards testing its next major resistance near 1.1350 region.

On the flip side, weakness back below 1.1215-10 immediate support seems to drag the pair back towards 100-day SMA support near 1.1185-80 region below which renewed selling pressure is likely to take the pair back towards testing the very important 200-day SMA support near 1.1160-55 region before eventually dropping to an important horizontal support near 1.1125-20 zone.