EUR/USD forecast: Bears likely to target 1.1250 key support, US retail sales eyed for fresh impetus


  • The USD benefitted from the safe-haven flow and exerts some pressure.
  • Investors cover their USD bearish bets ahead of next week’s FOMC meeting.
  • Friday’s US monthly retail sales data will be eyed for some trading impetus.

The EUR/USD pair extended the previous session's pullback from closer to 11-week tops and lost some additional ground on Thursday. The US Dollar attracted some haven flows amid deteriorating risk sentiment on the back of fears of a further escalation in trade tensions between the world's two largest economies and exerted some pressure on the major. The shared currency depreciated further after the IMF said that the Euro-zone is facing significant risks due to global trade tensions, a possible no-deal Brexit and debt-laden countries’ failure to reform.

The pair traded well below the 1.1300 handle and remained on the defensive near weekly low through the Asian session on Friday, rather unaffected by the likelihood of a Fed rate cut before the end of this year. The incoming softer US economic data - including last Friday's May monthly jobs report, coupled with slowing inflation raised prospects for at least two rate cuts in 2019. However, the fact that the move is largely priced in, investors seemed inclined to cover their USD bearish positions heading into next week’s FOMC policy meeting.

Ahead of the next big event risk, a slew of Chinese macro data will influence the broader market risk sentiment and provide some short-term impetus. Later during the early North-American session, the US economic docket – highlighting the release of monthly retail sales data, might further contribute towards producing some meaningful trading opportunities on the last trading day of the week. 

Looking at the technical picture, the pair continued with its struggle to find acceptance above 100-day SMA and started retreating from 50% Fibonacci retracement level of the 1.1558-1.1107 downfall. A subsequent slide below the 1.1255-50 horizontal zone will point to the resumption of the prior well-established bearish trend and accelerate the slide towards the 1.1200 round figure mark. The latter coincides with 23.6% Fibo. level and should now act as a key pivotal point for the pair's next leg of a directional move.

On the flip side, any meaningful up-move beyond the 1.1300 handle might continue to confront some fresh supply near the 1.1330-35 region (50% Fibo. level), which if cleared decisively might trigger a near-term short-covering rally towards 61.8% Fibo. level, around the 1.1385 level. A follow-through buying has the potential to lift the pair beyond the 1.1400 handle towards challenging March swing highs, around mid-1.1400s.

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

EUR/USD stabilizing as US coronavirus cases continue to climb

EUR/USD is trading around 1.1250, pressured amid concerns about the spread of coronavirus in the US. Traders are digesting the upbeat Non-Farm Payrolls figures already out ahead of the long US weekend. 

EUR/USD News

GBP/USD attempting a bounce amid thin liquidity

GBP/USD is closer to 1.25, off the lows. Top-level EU-UK Brexit talks have been postponed until next week amid disagreements. The UK is continuing to reopen while US coronavirus cases are surging. 

GBP/USD News

Bitcoin must endorse the time of Ethereum has come

The crypto market remains in a choke point, and after signs of a possible upward shift yesterday, the market was once again disappointed to see Bitcoin in the low range of the $8900 to $9000 choke point.

Read more

Gold: There is a bearish signal on the 4-hour chart

Price action has been slow on Friday due to the bank holiday in the US as the nation celebrates independence day. This week has been an interesting one as there has been some good economic data but some very bad coronavirus news in the US. 

Gold News

S&P 500: Futures struggle to refresh two-week top

S&P 500 Futures prints mild loss of 0.10% while declining to 3,126 during the initial hour of Tokyo session on Friday. In doing so, the risk barometer fails to extend the previous four-day winning streak.

Read more

Forex Majors

Cryptocurrencies

Signatures