EUR/USD subdued around 1.1020, US data eyed

The common currency remains entrenched in the negative territory at the end of the week, taking EUR/USD to the 1.1020/10 area.

EUR/USD supported at 1.10 ahead of US Retail Sales

The pair has found decent support around the psychological 1.1000 level today, although a potential test of yesterday’s troughs in the vicinity of 1.0980 still remains a chance as market sentiment remains tilted towards the buck.

In fact, USD has recovered the positive mood after Thursday’s retracement, always well underpinned by rising expectations of a Fed’s move by year-end. It is worth noting that according to CME Group’s FedWatch tool, the probability of a rate hike in December is at 60% based on Fed Funds future prices.

Data in Euroland saw final Spanish HICP for the month of September coming in flat on a yearly basis, while Italian inflation figures rose 0.1% YoY.

Across the pond, USD will take centre stage in light of the publication of Retail Sales for the month of September and the flash print of the Consumer Sentiment for the current month. In addition, Boston Fed E.Rosengren (voter, dovish (?), and one of the triple dissenters at the latest FOMC meeting) and Chair J.Yellen are due to speak at the Boston Fed Conference.

EUR/USD levels to watch

The pair is now losing 0.36% at 1.1018 and a break below 1.1001 (7-month support line) would target 1.0950 (low Jul.27) en route to 1.0909 (low Jun.24). On the other hand, the next up barrier is located at 1.1173 (200-day sma) followed by 1.1240 (resistance line off 2016 high) and finally 1.1279 (high Sep.26).