EUR/USD: Recovery appears limited ahead of German CPI, US GDP

EUR/USD is looking to break higher from the overnight consolidation box and regain 1.1700 levels and beyond ahead of the German CPI and US Q2 GDP data due on the cards later today.

EUR/USD: Corrective slide stalls

The main currency pair is back on the bids in the Asian trades this Friday, as the US dollar stalled its recovery and turned back in the red zone against its major peers. The USD index now trades -0.05% lower at 93.70, having faced rejection at 93.95 levels.

The greenback staged a solid comeback and reversed most of its Fed outcome induced losses, after the Treasury yields rebounded on the back of solid US durable goods data, which raised hopes of a storng Q2 advance GDP print.

The USD bulls eagerly await the US growth numbers, which may provide some support to the US currency from the recent sell-off and hence, could limit further upside bias in EUR/USD. The US economy is expected to have grown around 2.6% in Q2 versus 1.4% growth seen in the first quarter. 

Meanwhile, the Euro could gain fresh impetus from the German prelim CPI figures, which will be closely watched, as inflation weakness remains a key concern for the ECB policymakers. However, the main risk event for today remains the US GDP figures, while FOMC member Kashkari’s speech will also garner a lot of attention later today.

EUR/USD Technical Set-up  

According to Valeria Bednarik, Chief Analyst at FXStreet noted: “…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. Support levels: 1.1650 1.1615 1.1580 Resistance levels 1.1690 1.1745 1.1790.”