EUR/USD: US data and fear of the Delta variant to push the pair lower

EUR/USD has been struggling to recover amid a risk-off mood. New lows in sight? US data, Delta and technicals all point lower, according to FXStreet’s analyst Yohay Elam.

The downbeat market mood could extend for another day

“The US consumer is in focus on Friday, with all-important Retail Sales expected to show a decline in June, extending May's slide. Disappointing data did not hurt the dollar on Thursday and it could advance on Friday if fresh concerns arise.”

“What do shoppers think about inflation? The University of Michigan's preliminary Consumer Sentiment figures for July may provide some answers. If the inflation components of this survey rise, the dollar could follow suit. The Fed and markets are following forward-looking figures closely.” 

“The Delta covid variant is spreading on both sides of the pond. The Netherlands, Cyprus, Spain and Portugal are the old continent's current hotspots, but infections are creeping higher also in other countries. That could slow the recovery. In America, cases are much lower, but are on the rise in several places – and the immunization drive has stalled. However, while the euro suffers from growth concerns, the dollar benefits from safe-haven flows.” 

“Euro/dollar is suffering from downside momentum on the four-hour chart and has slipped back below the 50 Simple Moving Average. As the Relative Strength Index is outside oversold territory, there is room for more falls.”