EUR/USD Forecast: Still in consolidation mode, FOMC minutes in sight

The dollar almost made it through and eventless week before disappointing retail sales and PPI data raised concerns about economic growth in the second half of the year.   

US retail sales held steady at a seasonally adjusted $457.73 billion in July, below expectations of a 0.4% rise. Separated data showed PPI contracting 0.4% in July, while core prices dropped 0.3% in the same period, also missing expectations of moderate increases. On the other side of the pond, GDP and CPI data for Eurozone and some of its members came in mostly in line with expectations.

The US dollar plummeted across the board following the releases, as disappointing figures suggest the Fed doesn’t need (and probably won’t) hurry to raise interest rates before the year ends. However, the greenback managed to take back some losses afterwards, although it remains on track for weekly losses against the euro and the yen.

Next week sees US report its inflation readings on Tuesday and FOMC minutes on Wednesday, which could shed some light on Fed’s thinking.

EUR/USD technical view

EUR/USD managed to post a weekly gain, and to take back previous week's losses, but overall the pair remains in consolidation mode just below the 100-day SMA. EUR/USD would need a decisive break above the 1.1230 zone to shift focus toward the 1.1300 area, where the 23.6% retracement of the broader 1.3992/1.0461 decline stands, en-route to June highs at 1.1427.

However, longer-term indicators still favor a downward continuation. A break below 1.1100 would pave the way toward post-Brexit lows in the 1.0910 zone as immediate bearish target.