EUR/USD flirts with 100-day MA support ahead of China data
|- EUR/USD is probing the crucial 100-day moving average support at 1.1270.
- The pair closed below 1.1283 on Thursday, confirming a bearish candlestick pattern.
- EUR/USD will likely find acceptance below the 100-day MA in Europe if China reports a weaker-than-expected macro data.
EUR/USD is sitting on the 100-day moving average (MA) support of 1.1270 with investors awaiting the release of China’s industrial production and retail sales data for May.
The currency pair closed below 1.1283 on Thursday, validating the bearish outside day candle created on Wednesday.
Put simply, the bounce from recent lows near 1.11 seems to have made a temporary top at 1.1348 and the stage is set for a deeper pullback in case China’s macro data, due for release at 07:00 GMT, revives fears of a sharp slowdown in the world’s second largest economy.
China’s industrial production is forecasted to increase by 5.5% year-on-year in May following a 5.4% rise in April. meanwhile, consumer spending, as represented by retail sales, is expected to have increased at an annualised rate of 8.1% in May, following April’s 7.2% growth.
A big beat on industrial production is required to put a strong bid under the risk assets and weaken haven demand for the US Dollar.
However, if the data is weak, then the pair could find acceptance below the 100-day MA support at 1.1270 ahead of the US retail sales data, scheduled for release at 12:30 GMT.
German Wholesale Price Index (YoY) (May) due at 06:00 GMT is unlikely to have a big impact on the EUR pairs, unless the actual number prints way above or below estimates, in which case it would draw market attention.
Technical levels
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