- EUR/USD is looking weak, having faced rejection at the key falling trendline hurdle on Wednesday.
- A weaker-than-expected German data will likely push the spot below the crucial support at 1.1187.
EUR/USD is on the defensive ahead of the German retail sales data, having faced rejection at the key trendline hurdle.
The currency pair failed to cut through the resistance of the trendline connecting March 20 and April 17 highs and closed below 1.12 on Wednesday as the dollar picked up a bid following the FOMC rate decision.
The central bank kept rates unchanged as expected. Chairman Powell, however, pushed back expectations that the central bank’s next move would be a rate cut by associating low inflation with transitory factors. Powell added further that there is no strong case for a rate move in either direction, disappointing traders looking for a hint of a rate cut.
With the strong rejection at the descending trendline, the pair ended up creating a candle with a long upper shadow – an early sign of bearish reversal, which would be confirmed if the pair finds acceptance below 1.1187 today.
That could happen if the German Retail Sales, due at 6:00 GMT, confirm the vulnerability of the Eurozone’s largest economy. The data is expected to show the consumer spending contracted 0.4 % month-on-month in March, following a 0.9% rise in February.
Post-retail sales, the market focus would shift to the German Markit MAnufacturing PMI (Apr), scheduled for release at 07:55 GMT. As of writing, the spot is trading a 1.1208.
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