EUR/USD: dollar shrugged off poor US data, retains negative bias - FXStreet

Valeria Bednarik, chief analyst at FXStreet explained that the EUR/USD pair managed to advance up to 1.1221 ahead of Wall Street's opening, on dismal US data.

Key Quotes:

"US retail sales for July came in flat on the month versus expectations of a 0.4% monthly gain, while the Producer Price Index for final demand decreased 0.4% in the same month. On an unadjusted basis, the final demand index moved down 0.2% for the 12 months ended in July. Disappointing retail sales and low PPI suggest the FED will be in no rush to raise rates.  Adding to the dollar's bearish case was the Michigan University index of consumer sentiment, at 90.4 for August against expectations of 91.5.

The dollar shrug off negative data and recovered most of the ground lost against the common currency, with the EUR/USD pair closing the week at 1.1161 and retaining its underlying negative bias, as in the daily chart, the pair retreated sharply once again from its 100 DMA. In the same chart, the Momentum indicator has turned lower within positive territory, whilst the RSI indicator continues lacking clear directional strength around neutral territory. The 20 DMA heads higher around 1.1090, converging with the 50% retracement of the latest bullish run and being the level to break to confirm additional slides. In the 4 hours chart, a bullish 20 SMA contained the downside during the past sessions, but is now a handful of pips below the current level, while the technical indicators head modestly lower around their mid-lines, increasing the risk of a downward extension for this Monday."