The dollar remained on the defensive side on Thursday, weighing the Dollar Index down below a key mark of technical support on the charts, even after official data indicated that a tentative recovery in the U.S. job market had persisted despite a second wave of coronavirus cases that have infected the country. 

EUR/USD was trading below 1.1350, after hitting the highest level since June 11. The pair faced mixed sentiment which allowed the greenback to briefly recover some of its losses. The eurozone’s shared currency stalled in its gains against the dollar on Thursday, while initial unemployment claims in the U.S. surpassed 1.314 million. 

"While the dollar has rallied in early trading the overall move lower for the greenback continues, helping to bolster the euro and sterling. The latter in particular has enjoyed a good few days, and yesterday’s statement from the chancellor confirms that the UK government is looking to keep providing stimulus in various forms, even if the amounts discussed on Wednesday are smaller," says Chris Beauchamp, chief market analyst at IG.

GBP/USD was seen rallying above 1.26, with the pound gaining from broader weakness in the U.S. Dollar. The advancements arrived as UK Chancellor Rishi Sunak announced a £30 billion stimulus package and promised to provide further support. The short-term outlook for the sterling has improved significantly over the past week. The pair closing above the $1.2540 mark hints at a move to test the resistance of the $1.2810 highs seen in June, supported by daily improving momentum.