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• EUR/USD pitched lower despite Thursday’s improved risk appetite.
• US Retail Sales climbed much higher than expected.
• US data to dominate the remainder of the trading week with consumer sentiment.

EUR/USD took a dive back below the 1.1000 handle on Thursday despite a broad-market recovery in investor sentiment. US Retail Sales growth lurched to an 18-month high of 1.0% MoM in July, well above the forecast 0.3% and entirely engulfing the previous month’s -0.2% contraction. Improving economic health indicators are helping to stave off recent concerns of a potential recession within the US. 

However, not all is rosy in financial markets post-Retail Sales. According to the CME’s FedWatch Tool, rate markets are now pricing in just 25% odds of a 50 bps double cut from the Federal Reserve (Fed) in September, down significantly from last week’s peak bets of 70% odds. Rate traders have still fully priced in a September rate trim as a done deal, with 75% odds of at least 25 basis points off of the top on September 18.

US data will take center stage for Fiber traders on Friday, where the University of Michigan’s Consumer Sentiment Survey Index is expected to show an improvement in consumer economic expectations, with the figure forecast to tick up to 66.9 from an eight-month low of 66.4.

EUR/USD price forecast
 

EUR/USD snapped a recent winning streak, tumbling back below the 1.1000 major handle on Friday. Bulls appear set to run out of gas and near-term momentum threatens to drag the Fiber back into a rough descending channel that has plagued the pair through 2024. 

Bidders will be looking for technical support from a rising pattern of higher lows on daily candlesticks, but EUR/USD remains poised for a quick snap back toward the 200-day Exponential Moving Average (EMA) at 1.0826.

EUR/USD daily chart
 

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