EUR/USD Forecast: Dismal mood pushes the dollar higher

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1756

The EU Gross Domestic Product printed at 2.0% in the second quarter.
US Retail Sales came in worse than anticipated, down by 1.1% MoM in July.
EUR/USD trades just above the 1.1750 support area and is poised to extend its slide.

The American dollar retained its strength through the first half of the day, mainly against high-yielding rivals amid persistent risk-aversion. The EUR/USD pair bottomed at 1.1759 during European trading hours, following the release of unimpressive local data. The preliminary estimate of the Q2 Gross Domestic Product printed at 2% as expected, although the annual reading came in slightly below expected at 13.6%. Employment change in the same quarter beat expectations, up 1.8% vs the -1.8% previous.

The pair extended its slide to 1.1748 after the release of US Retail Sales, which were worse than anticipated, falling 1.1% MoM in July. The core reading Retail Sales Control Group was down 1%, also missing expectations. The US will also publish July Industrial Production and Capacity Utilization, while Federal Reserve chief Jerome Powell is scheduled to speak in a non-monetary policy event.

EUR/USD short-term technical outlook

The EUR/USD pair is at risk of falling further as the dismal market’s mood persists. The 4-hour chart shows that it is currently crossing below its 20 SMA, which loses bullish strength. Technical indicators have accelerated their declines, the Momentum within positive levels, and the RSI already below its midline, pointing to a bearish continuation, mainly if the pair pierces the mentioned daily low.

Support levels: 1.1750 1.1705 1.1660

Resistance levels: 1.1790 1.1830 1.1880

View Live Chart for the EUR/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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