EUR/USD: Downside opening up towards 1.1750, German GDP – Up next

The EUR/USD pair extended its overnight bearish consolidation phase into Asia this Tuesday, as markets eagerly awaited fresh impetus from the German prelim GDP and US retail sales data for the next direction.

EUR/USD capped below 1.1800 amid light trading

The main currency pair continues to fluctuate between gains and losses so far this session, with the upside limited by 1.18 handle, as the greenback remains broadly bid amid rallying Treasury yields and risk-on rally in the Asian equities.

Risk-on sentiment remains at full steam, after the North Korean tensions subsided on the latest headlines reported by the WSJ: North Korea has decided not to launch a threatened missile attack on Guam.

Moreover, expectations of a rebound in the US retail sales combined with renewed optimism surrounding the Trump administration, further keeps the US dollar buoyant across the board.

The immediate focus now remains on the German prelim GDP data, which will offer some incentives to the EUR traders amid holiday-thinned markets. However, the main risk event for today remains the US retail sales data, which will have a major influence on the Fed’s rate hike outlook and in turn on the buck.

EUR/USD Technical Set-up  

Valeria Bednarik, Chief Analyst at FXStreet explains: “The 4 hours chart shows that the price held a few pips above its 20 and 100 SMAs, whilst the Momentum indicator retreats within positive territory, with the RSI indicator also heading lower around 46, anticipating some further slides ahead short term. To the upside, the pair needs to advance beyond 1.1820 to be able to gain ground sustainably, aiming then to retest the year high of 1.1909. Support levels: 1.1770 1.1735 1.1690 Resistance levels: 1.1820 1.1860 1.1910.”