Bullish view
- Buy the EUR/USD and set a take-profit at 1.1900.
- Add a stop-loss at 1.1700.
- Timeline: 2-3 days.
Bearish view
- Set a sell-stop at 1.1750 and a take-profit at 1.1650.
- Add a stop-loss at 1.1800.
The EUR/USD remained in a consolidation mode as the market reflected on the recent inflation and industrial production numbers from the US. The pair is trading at 1.1800, which is a few pips below Wednesday’s high of 1.1832.
US Retail Sales and Eurozone Inflation Data Next
The EUR/USD pair is in a tight range as investors reflect on the latest economic data from the United States. The numbers published this week showed that consumer inflation declined in August as airfares fell.
And on Wednesday, data by the Commerce Department showed that the export price index dropped from 1.1% in July to 0.4% in August. The import price index fell from 0.4% to -0.4%. At the same time, industrial production fell from 0.8% to 0.4%. Manufacturing production fell from 1.6% to 0.2%. These numbers show that the country’s economy is slowing down.
Later today (Thursday), the key mover for the EUR/USD will be the American retail sales and initial jobless claims numbers. Economists polled by Reuters expect the data to show that the overall retail sales declined by 0.8% in August after falling by 1.1% in the previous month. Core sales, which exclude the volatile food and energy products is expected to fall by 0.1%.
The trends in retail sales is because of the relatively higher prices. Besides, inflation has risen faster than the overall wage growth.
The other key data will be the initial jobless claims numbers. Economists expect the data to show that initial claims rose from 310k to 330k last week. This is notable since the federal government ended its expansive enhanced jobless benefits last month.
Meanwhile, Christine Lagarde, the ECB president will have a speech in which she will talk more about the bank’s policies. The speech will come a day ahead of the final EU inflation data.
EUR/USD Forecast
The EUR/USD pair remained in a tight range ahead of the US retail sales data and speech by Christine Lagarde. The pair declined to 1.1800, where it has been recently. It is a few pips below the 25-day and 50-day moving averages (MA) and the Ichimoku cloud on the daily chart. It is also a few points above the key support at 1.1718, which was the lowest level in June. Therefore, the pair will likely remain firm as investors reflect on this week’s data.
