EUR/USD falls to 1-week low ahead of U.S. data

The euro fell to a one-week low against the U.S. dollar on Thursday, as investors awaited the release of U.S. data later in the day and as trading volumes became increasingly thin ahead of the New Year holiday on Friday.

Heading into the final trading session of the year, volumes were expected to remain light as many traders already closed books, reducing liquidity in the market which could result in exaggerated moves.

EUR/USD hit 1.0888 during European afternoon trade, the pair’s lowest since December 23; the pair subsequently consolidated at 1.0890, sliding 0.39%.

The pair was likely to find support at 1.0845, the low from December 21 and resistance at 1.0991, the high of December 29.

Markets shrugged off a report released on Wednesday by the U.S. National Association of Realtors showing that its pending home sales index inched down 0.9% last month, disappointing expectations for a gain of 0.5%.

Pending home sales in October rose by 0.4%, whose figure was revised from a previously reported gain of 0.2%.

The dollar had strengthened broadly after the Conference Board reported on Tuesday that its consumer confidence index rose to 96.5 in December from 92.6 in November.

Investors were eyeing the release of the weekly U.S. jobless claims report, as well as data on manufacturing activity in the Chicago area due later in the day.

Investors also continued to focus on the oil market amid ongoing concerns over a global supply glut after the U.S. Energy Information Administration reported an unexpected rise in crude oil inventories on Wednesday.

Crude oil futures for February delivery were down 0.64% at $36.37 in European afternoon trade, not far from the 11-year low of $35.98 hit on December 22.

The euro was also lower against the pound, with EUR/GBP dropping 0.50% to 0.7342.