In his new tweet, Trump denied pressure for a trade deal with China and confirmed that his country “will soon be taking in billions in tariffs”. This statement sent the China’s yuan lower and thus has partially eased the downside pressure on the greenback. It looks like the trade conflict between the two countries is far from being resolved, which means the buck still has a potential despite the recent waves of weakness.
In the short term however, the EURUSD pair could get a chance to challenge the 1.17 barrier with the immediate target at 1.1720, should the US retail sales report disappoint. The weak CPI figures pushed back investor expectations for further Fed rate hikes, and now some market participants are starting to doubt that the will dare to hike two more times this year. This is a significant downside risk for the greenback, so retail sales data should come in better than expected to reassure the dollar bulls.