After finding support at 1.1650 handle in the NA session, the EUR/USD pair started to consolidate its daily losses and is now moving in a tight range around the 1.1680 mark, where it's recording a 0.5%, or 60-pip, loss.
The greenback started to correct its sharp losses from yesterday on Thursday and received an additional boost from today's macro from the United States and pushed the US Dollar Index to a new daily peak at 93.90 in the NA session. At the moment, the index is at 93.80, up 0.55% on the day.
The U.S. Census Bureau on Thursday revealed that the international trade deficit decreased by $2.5 billion to $63.9 billion in June. Finer details of the report showed that both wholesale and retail inventories expanded by 0.6% on a monthly basis, which ramped up the expectations for a robust second quarter GDP growth reading tomorrow. Following the data, the Federal Reserve Bank of Atlanta said that the final GDPNow model forecast for real GDP growth in the second quarter of 2017 was revised up to 2.8% from 2.5% in the previous week.
- US: International trade deficit was $63.9 billion in June
- Atlanta Fed: GDPNow model forecast for real GDP growth in Q2 is 2.8%
Moreover, Citigroup also raised its Q2 GDP growth forecast to 2.9% from 2.5% on stronger-than-expected inventory growth in June and explained that inventories likely added 0.9% point to GDP growth after subtracting 1.1% from Q1 GDP, as reported by Reuters.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "the EUR/USD pair retreated after nearing the top of the ascendant channel that leads the way since mid May, holding in the upper half of it and paring losses around its 20 SMA in the 4 hours chart, while technical indicators in the mentioned time frame have corrected overbought conditions, but pared their declines around their mid-lines, from where they are currently bouncing, indicating that the intraday slide was more due to profit taking than amid selling interest."
According to the analyst, the pair could find support at 1.1650, 1.1615 and 1.1580 while resistances align at 1.1690, 1.1745 and 1.1790.
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