EUR/USD consolidates losses, remains below 1.18
The EUR/USD pair touched its lowest level since June 28 at 1.1686 in the first half of the NA session before starting to consolidate its losses. As of writing, the pair was trading in a tight range around 1.1740, losing 0.35% on the day.
Before the data from the U.S. helped the greenback gain traction and build on its gains from Monday, the pair faced pressure amid a weakening euro. After today's data from Germany showed that the preliminary GDP growth on a yearly basis in the second quarter of 2017 plummeted to 0.8% from 3.2% (revised from 1.7%), the shared currency lost strength against its rivals. In fact, the Euro Index is now at 93.93, dropping 0.15% on Tuesday. Today's dismal data from Germany is also pointing to a possible weaker-than-expected Eurozone GDP growth in the second quarter, which is scheduled to be released tomorrow and is expected to remain unchanged at 2.1% on a yearly basis.
Later in the session on Wednesday, the FOMC is going to release the July meeting minutes. A relatively optimistic or hawkish statement from the Committee could allow the greenback extend its recovery gains. As of writing, the DXY is at 93.75, looking to close the second straight day higher.
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Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "...the 4 hours chart, indicate that the pair may continue falling, as the Momentum indicator keeps grinding south within negative territory while the RSI consolidates around 40, and the price below its moving averages. These lasts, are losing directional strength and within a limited range, reflecting the uncertainty going on about where to go next."
According to the analyst, supports for the pair could be seen at 1.1735 and 1.1690, while resistances align at 1.1820, 1.1860 and 1.1910.
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Today's data from the U.S.
- US: Retail sales for July 2017 were $478.9 billion, an increase of 0.6% from June
- NY Fed: Business conditions index climbed fifteen points to 25.2, highest level in nearly 3 years
- US: Prices for US imports edged up 0.1% in July
- US: Manufacturers’ & trade inventories estimated at $1,869.3 bln, up 0.5% from May 2017
- US: Consumer demand started the third quarter on a strong footing - Wells Fargo