- EUR / USD remains on the defensive near 1.1800.
- The dollar rally puts the pair under additional pressure.
- Eurozone final core CPI and US retail sales stand out on today’s economic calendar.
The selling pressure remains firm around the common currency and keeps EUR / USD under pressure near 1.1800 region during the European session on Friday.
EUR / USD down due to USD strength, focus is on data
EUR / USD is moving lower for the second day in a row, challenging the key support of 1.1800 on Friday, always in response to the persistent buying bias around the US dollar and a decline in German yields.
Indeed, yields on the German 10-year benchmark sink into the area of recent lows around -0.34% on Friday, levels last seen in April.
The best sentiment around the USD comes after the Fed members have recently opened the door to the likelihood that the tightening in bond purchases could start sooner than markets anticipate, probably by the end of the current year. Furthermore, Fed Chairman Powell hinted at the idea that high inflation could last longer than estimated.
In the euro economic calendar, the final eurozone inflation figures for June will be published below. Across the Atlantic, the focus will be on retail sales and preliminary consumer sentiment for the month of July.
What can we expect around the EUR?
The resumption of the decline in EUR / USD challenges the 1.1800 region with rising prospects for another visit to the monthly lows in the 1.1770 / 80 region in the not-too-distant future. As is customary in recent weeks, price action around the pair is expected to depend exclusively on dollar dynamics, particularly as investors continue to adjust to the optimistic message from the Fed, the prospects for higher inflation in the United States. States and a possible adjustment in the bond purchase program ahead of schedule.
EUR / USD levels
At the time of writing, the EUR / USD pair is down 0.02% on the day, trading at 1.1808. A breakout of 1.1771 (July 14 low), would target 1.1762 (78.6% Fibonacci retracement of the November-January move) and 1.1704 (March 31 low). On the other hand, the next resistance is at 1.1895 (July 6 high), followed by 1.1975 (June 25 high) and finally 1.2002 (200-day SMA).