EUR/USD Tests Trendline Resistance

📊 EUR/USD Analysis – Euro Rebounds as Dollar Retreats, Focus on US Retail Sales

The Euro edged higher in Friday’s session after a near 0.5% drop on Thursday, supported by a temporary pullback in the US Dollar and fading impact from strong US Producer Price Index (PPI) data. Markets are shifting their focus away from the recent inflation pressure toward upcoming political and economic events.

In the US, annual PPI growth accelerated to 3.3% — the fastest pace in three years — tempering expectations for a larger Federal Reserve rate cut in September. Nonetheless, markets still assign a high probability to a 25‑basis‑point reduction. The modest Dollar retreat has reinforced risk‑on sentiment, lending support to the Euro.

In Europe, the final estimate for Q2 GDP showed only 0.1% quarterly growth (1.4% YoY), alongside a sharper‑than‑expected decline in Industrial Production, underscoring the region’s weak economic momentum. While these figures maintain downside pressure on the Euro, geopolitical developments could shift the balance.

Today’s market focus is on two key events: July US Retail Sales — a key gauge of consumer strength — and the meeting between the US and Russian presidents in Alaska aimed at ending the conflict in Ukraine. Any progress in negotiations could lift market sentiment and provide further support to the Euro.

📈 Technical Outlook
EUR/USD remains capped below descending trendline resistance around 1.1730. The 4‑hour RSI is hovering near the 50 level, with bearish divergence serving as a caution for buyers. Key supports are located at 1.1635 and then 1.1590, while a sustained break above 1.1735 could open the path toward 1.1789 and 1.1830.