• Mostly in line Eurozone macro data assisted EUR/USD to gain some traction on Friday.
  • Awful US Retail Sales data undermined the dollar and remained supportive of the uptick.
  • Worsening US-China relations capped the upside and held the pair in a familiar range.

The EUR/USD pair continued with its two-way price action on Friday, albeit remained confined well within a familiar trading range held over the past 1-1/2 week or so. The pair continued showing some resilience below the 1.0800 round-figure mark and gained some positive traction following the release mostly in line prelim German/Eurozone GDP reports. Data released on Friday showed that the German economy contracted by 2.2% and the broader Eurozone contracted by 3.8% during the January-March quarter.

From the US, the monthly retail sales missed consensus estimates by a big margin and plunged 16.4in April. The US dollar turned lower in reaction to the awful macro data and provided an additional boost to the major. However, fears about the second wave of coronavirus infections, along with worsening US-China relations continued lending some support to the greenback's relative safe-haven status and capped any meaningful upside for the pair. In the latest development, the US Commerce Department announced to bar Huawei from acquiring semiconductors and chipsets made using US software and technology.

The pair retreated around 30 pips from daily swing lows, though managed to regain some positive traction on the first day of a new trading week. The easing of lockdown restrictions in some parts of the world fueled hopes a recover in the global economy and boosted investors' confidence. This, in turn, undermined the USD and was seen as a key factor lending some support to the major. In the absence of any major market-moving economic releases, either from the Eurozone or the US, the pair remains at the mercy of the broader market risk sentiment and the USD price dynamics.

Short-term technical outlook

From a technical perspective, the recent range-bound trading action warrants some caution before placing any aggressive directional bets. Bears are likely to wait for a convincing break below the 1.0775 horizontal support to confirm any further near-term depreciating move towards the 1.0700 round-figure mark. Some follow-through selling now seems to turn the pair vulnerable to slide further to retest YTD lows, around the 1.0635 region.

On the flip side, the 1.0850 region might continue to act as an immediate resistance, above which the pair is likely to make a fresh attempt towards reclaiming the 1.0900 mark. A sustained strength beyond the mentioned hurdle might prompt a near-term short-covering move and should assist the pair to accelerate the move up towards the 1.0980 supply zone en-route the key 1.1000 psychological mark and the very important 200-day SMA, around the 1.1015 region.

fxsoriginal

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

AUD/USD consolidates, bulls eye push towards 0.7400

AUD/USD is currently trading just below Tuesday highs at 0.7369, as bulls eye a push towards the 0.7400 level. A significant improvement in global risk appetite gave AUD a boost on Tuesday and sets the currency up well for the coming Wednesday Asia session.

AUD/USD News

Gold consolidates above $1,800, hangs near four-month lows

Gold holds just above the $1,800 threshold while taking rounds close to four-month lows. The hopes of the US stimulus and recovery from the coronavirus (COVID-19) keep the gold bears hopeful. DJI30, S&P 500 closed at the record top, DXY eased.

Gold news

NZD/USD wavers around 2.5-year high below 0.7000 even as RBNZ’s Orr backs low interest rates

NZD/USD keeps the choppy trading above 0.6965, easing five pips off-late. RBNZ Governor Adrian Orr says low interest rates ensure NZD’s competitiveness. A light calendar in Asia highlights risk news for fresh impulse.

NZD/USD News

On-chain metrics spell trouble for Bitcoin, Ethereum, and XRP despite on-going bull rally

The top three cryptocurrencies are seeing massive gains over the past few days. BTC price is close to its all-time high, currently trading at $19,300. XRP had a massive 242% colossal rally in the past week. ETH also closely following BTC's step.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info

Forex Majors

Cryptocurrencies

Signatures