- Explore the latest EUR/USD technical outlook and key economic indicators that could impact your trading strategy.
EUR/USD is trading around 1.1650 during the European trading session on Friday. There is no specified direction, as traders are following the key German data. Markets await August preliminary Consumer Price Index (CPI) data from Germany later today. While the German retail sales figures just released with disappointing.
Then, during the North American session, attention will move toward the July US Personal Consumption Expenditures (PCE).
In this article, we will explore how these economic indicators influence EUR/USD movements, highlighting both previous and forecasted figures. We will also cover the technical outlook for the EUR/USD currency pair, and finally, address the key FAQs about the euro.
EURUSD | Key Economic Indicators to Watch Today:
- German Retail Sales: Germany’s Federal Statistics Office reported today, on Friday, that July retail sales rose 1.9% year-over-year, easing from June’s sharp 4.9% increase and falling short of the 2.6% growth expected. On a monthly basis, sales declined 1.5%, reversing June’s 1% gain and missing the forecast of a 0.4% drop.
- The softer-than-expected data adds pressure on the euro, as it signals weakening consumer demand and may influence the ECB’s policy outlook, potentially limiting EUR/USD upside in the near term.
- Traders are waiting for the Consumer Price Index in Germany, while the previous was 0.3% MOM, and the forecast is 0.0%, with no change forecasted.
- The EUR/USD faces challenges as the US Dollar strengthens. Yesterday, the stronger-than-expected US GDP data was released. The economy grew 3.3% in Q2 on an annualized basis, beating forecasts of 3.1% and the prior 3.0%.
- Later in the North American session, the US Personal Consumption Expenditures (PCE) will be released. It is forecasted to rise 2.6% year-over-year in July, and the core PCE is expected to increase 2.9% year-over-year.
- The strong US PCE data could lower expectations of a Fed rate cut.
EUR/USD Technical Outlook:
From the technical perspective, the EUR/USD currency pair is trading in a narrow range on the 4-hour time frame. Ranged between the key support level of $ 1.1505 and the key resistance level of $ 1.1740.
A clear 4-hour close above $1.1704 could confirm a short-term bullish trend for the EUR/USD, potentially reaching $1.1786. while the MACD signals bullish momentum, and the Relative Strength Index (RSI) is just above 50, pointing to upside bias.
On the flip side, a break below the 100-day moving average at $1.1631 could open the path to lower levels, targeting $1.1573, the low of August 27. Check the EUR/USD technicals from three months ago to see how the pair outperformed.
Investors are expected to keep selling the US Dollar before the US PCE figures are released. This could keep the EURUSD hovering above 1.1660. Market sentiment remains cautious ahead of the data.
Due to the uncertainty around President Trump’s tariff policies. This weakens the US Dollar due to weighing on the US economy’s health. In turn, the euro has seen significant gains against the dollar.
These fundamental factors have a significant impact on the price movements of the currency pair, which could affect your trades and put your money at risk.
Eurozone inflation is measured by the HICP (Harmonized Index of Consumer Prices (HICP). The ECB’s target is to be 2%. If the inflation rises above this level, the ECB may raise interest rates to limit the increase in inflation. Higher rates usually boost the Euro by attracting more global investment.
The US Dollar index DXY often moves inversely to EUR/USD. Currently, DXY is near 98.15, just above key support at 97.70 as traders price in an 87% chance of a rate cut in September. Political tensions, including President Trump’s dismissal of Fed Governor Lisa Cook, have added uncertainty. This weakens the dollar’s appeal and supports EUR/USD gains.
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