EUR/USD Forecast: Euro could extend correction if 1.0300 resistance holds

EUR/USD has failed to clear the stiff resistance that sits at 1.0370 and has gone into a consolidation phase early Friday. In case buyers fail to reclaim 1.0300, the pair could continue to edge lower toward the end of the week.

With the initial reaction to soft producer inflation data from the US, EUR/USD managed to edge higher during the American trading hours on Thursday. The cautious market mood, however, didn't allow the pair to preserve its bullish momentum.

Meanwhile, San Francisco Fed President Mary Daly told Bloomberg that she was open-minded about the possibility of the US Federal Reserve opting for a 75 basis points (bps) rate hike in September, helping the dollar stay resilient against its rivals. Currently, the CME Group FedWatch Tool showed that markets are pricing in a 60% probability of a 50 bps rate increase next month.

Eurostat will release the Industrial Production data for June, which is expected to show an increase of 0.2% on a monthly basis. A reading below 0% could remind investors of the slowdown in the European economy and weigh on the shared currency. On the other hand, the shared currency could struggle to capitalize on a better-than-expected print unless it triggers a risk rally.

In the second half of the day, the University of Michigan will release the preliminary Consumer Sentiment Survey for August. The Consumer Confidence Index is forecast to improve modestly to 52.5 from July's final print of 51.5. Market participants will pay close attention to the long-run inflation expectations as well. In case this component rises above 3%, the greenback could gather strength in the late American session.

It's also worth noting that investors could look to book their profits toward the London fix and cause EUR/USD to stay on the back foot.

EUR/USD Technical Analysis

As of writing, EUR/USD was trading slightly below 1.0300, where the Fibonacci 50% retracement of the latest downtrend is located. In case the pair starts using that level as resistance, additional losses toward 1.0230 (Fibonacci 38.2% retracement, 200-period SMA on the four-hour chart) and 1.0200 (psychological level, 100-period SMA) could be witnessed.

On the flip side, 1.0370 (Fibonacci 61.8% retracement of the latest downtrend, Aug. 10 high) aligns as key resistance ahead of 1.0400 (psychological level) and 1.0450 (static level).