EUR/USD Forecast: modestly bullish, US Retail Sales awaited
|The EUR/USD pair holds on to its weekly gains early Friday, having met short term buying interest around 1.0600 on a pullback during Asian trading hours. Overnight, Chinese trade figures showed signs of slowing growth, as December's surplus reached $40.82 billion, versus $44.61 billion in the previous month, whilst exports plunged 6.1%, against an expected advance of 0.1%. Imports rose by 3.1%, beating expectations of 2.7%, but below a previously revised 4.7%. As for the ongoing European session, there's no data to take care of, leaving investors focused in the upcoming US Retail Sales and PPI December data. Sales in the US are expected to have advanced by 0.7% against previous 0.1%, while factory inflation is also expected to have advance. The figures may restore partially confidence in the USD, but at this point, the dollar remains vulnerable.
Technically, the pair retains a modest bullish stance according to the 4 hours chart, given that the price is above its 20 and 100 SMAs, although the shortest remains horizontal, reflecting the limited demand at the current levels. Technical indicators in the mentioned chart are standing in positive territory, but without directional strength. The pair has an immediate short term resistance at 1.0650, with a break above it favoring a new leg higher up to 1.0710, the 38.2% retracement of the latest monthly decline, whilst beyond it, the pair has scope to retest the critical 1.0800/40 region next week. Below 1.0600 on the other hand, the slide can extend towards 1.0560 first, en route to 1.0520.
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