EUR/USD directionless around 1.0870 ahead of German and US data
Although the EUR/USD pair on Thursday fell to its lowest level since April 24 at 1.0840, it remained in a relatively narrow 50-pip trading range ahead of tomorrow's important macro data. As of writing, the pair was trading at 1.0865, only a couple of pips below yesterday's closing level.
Today's decline occurred after the robust macro data from the United States helped the greenback gather strength. Additionally, the sharp drop witnessed in the GBP/USD following BoE Governor Carney's comments also put further weight on the pair through the conventional positive correlation. However, as the US Dollar Index failed to extend its gains in the NA session, the pair started to retrace its losses. At the moment, the US Dollar Index was flat at 99.50.
- US: Weekly initial claims was 236,000, a decrease of 2,000 from the previous week
On Friday, the investors will look to the GDP growth and the CPI data from Germany for fresh impetus ahead of the retail sales and consumer inflation figures from the United States. The GDP growth in Germany is expected to advance to 0.7% from 0.4% in the first quarter of 2017. On the other hand, after contracting 0.2% in March, the retail sales in the U.S. are expected to rebound to 0.6%. However, two of the biggest retailers in the U.S., Macy's and Kohl's, today announced a worse-than-expected drop in sales figures, suggesting a possible weak reading tomorrow.
Technical outlook
With a break below 1.0850 (daily low), the pair could target 1.0765 (200-DMA) and 1.0710 (100-DMA). To the upside, resistances align at 1.0935 (May 9 high) ahead of 1.10 (psychological level) and 1.1020 (May 8 high).
- Fade gains in EUR/USD – Scotiabank
- EUR/USD seen above 1.10 in the near term – Danske Bank