EUR/USD Current Price: 1.1872

  • June US Core PCE inflation came in at 3.5% YoY, below expectations.
  • The EU Gross Domestic Product improved to 2% QoQ in the second quarter.
  • EUR/USD is mildly bullish in the near-term, but faces critical resistance at 1.1920.

The EUR/USD pair retreated on Friday from a multi-week high of 1.1908, ending the week with substantial gains around 1.1870. The greenback edged higher after US inflation data came in worse than anticipated, somehow suggesting easing inflationary pressures. The core PCE Price Index printed at 3.5% YoY in June, ticking higher from the previous 3.4% but below the 3.7% expected. Stocks gave up some of their weekly gains, weighing on high-yielding assets.

Also, Personal Income in the country was up 0.1%, while Personal Spending increased 1% in June, beating the market’s expectations. Earlier in the day, the EU reported the preliminary estimate of its Q2 Gross Domestic Product, which was up 2% QoQ, while the German figure printed at 1.5%, missing the market’s expectations. Profit-taking amid the month-end provided some support to the dollar.

On Monday, Germany will publish June Retail Sales, while Markit will release the final readings of its July PMIs. In the US, the focus will be on the July ISM Manufacturing PMI, foreseen at 60.8 from 60.6 previously.

EUR/USD short-term technical outlook

The EUR/USD pair is neutral-to-bullish in the daily chart, although below a critical Fibonacci level at 1.1920. The daily chart shows that it is advancing above a flat 20 SMA, currently providing dynamic support at around 1.1820. The longer moving averages remain directionless around the 1.2000 area, while technical indicators recovered ground but lost momentum and currently consolidate around their midlines. According to the 4-hour chart, the pair retains chances of recovering ground, as it settled above all of its moving averages, with the 20 SMA providing immediate support at 1.1850. Technical indicators hold within positive levels, although with uneven strength and well below weekly highs.

Support levels: 1.1850 1.1805 1.1750

Resistance levels: 1.1920 1.1960 1.2000

 View Live Chart for the EUR/USD

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