EUR/USD consolidates gains, remains below 1.20
|The EUR/USD pair edged higher to a fresh two-day peak at 1.1987 in the early trading hours of the NA session and went into a consolidation phase amid a lack of fresh fundamental catalysts. As of writing, the pair was trading at 1.1970, gaining 0.4% on the day.
Today's data from the U.S. forced the US Dollar Index to continue its slide that started yesterday. The retail sales contracted in August while the total output of industrial production declined due to the negative impact of the Hurricane Harvey, which hurt the oil producers in Texas. After refreshing its lowest level since Monday at 91.60, the DXY retraced some of its losses and is now at 91.77, down 0.3% on the day. On a weekly basis, the index is holding on to small gains but a close below 92 would suggest that this week's move was a mere technical correction rather than a trend reversal.
With no more data left in the remainder of the session, the pair is unlikely to show any sharp fluctuations. Next week on Monday, the CPI from the euro area will be looked upon for fresh impetus. Markets expect the consumer inflation to rise by 0.3% in August after contracting 0.5% in July and see the annual rate remain unchanged at 1.5%.
Technical outlook
On Thursday, the pair was able to reverse its direction at the 1.1840 support, where the trend line coming from April is located, showing that the pair continues to move in its 5-month-long uptrend. Only with a decisive break below that level, the pair could extend its losses towards 1.1730 (Aug. 21 low) and 1.1660 (Aug. 17 low). On the upside, resistances could be seen at 1.2000 (psychological level), 1.2090 (Sep. 8 high) and 1.2170 (Dec. 31, 2014, high).
Today's data from the U.S.:
- US: Retail sales for Aug 2017 were $474.8 bln, a decrease of 0.2% from July
- US: Industrial production declined 0.9% in Aug following six consecutive monthly gains
- US: Consumer confidence edged downward in early September - UoM
- US: Manufacturers’ and trade inventories were at $1,873.9 bln, up 0.2% from June
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