EUR/USD's build-up of short positions since the beginning of October has remained largely intact, despite the squeeze higher from Tuesday's 1.1433 low to Thursday's 1.1572 high, according to EBS flow data.
That means vulnerable EUR/USD buy stops remain outstanding, which if triggered could propel EUR/USD through the daily cloud top at 1.1572, the 1.1579 Fibonacci level and the 55-DMA, currently at 1.1591.
The 1.1579 Fibonacci level is 38.2 percent of the 1.1815 to 1.1433 (September to October) decline.
Technically, the long tail on Tuesday's candlestick line has signaled a rejection of the downside, but a failure to register a daily close above the cloud top in coming sessions will increase market uncertainty.
Amid heightened risk aversion, FX traders are awaiting September U.S. CPI data later on Thursday to make their next move .
August euro zone industrial production out on Friday will also have a bearing on the direction of EUR/USD into the weekend .