Dollar shifts focus to economic data

The greenback is marginally lower against major counterparts on Thursday after yesterday’s ascent. In general, most currency pairs have gone into a consolidation mode as traders are cautiously awaiting fresh signals from the US-China trade front and also shift focus to the upcoming economic data.

For the EURUSD pair, German CPI data will be important in the context of easing prospects from the ECB. Weak numbers will reinforce expectations of additional stimulus at the next meeting. Meanwhile, the key figures are expected from the US. Q2 GDP data could affect market outlook for a rate cut by the Federal Reserve in September. Stronger-than-expected results will lower chances for further easing and thus will play into the dollar’s hands.

In this scenario, EURUSD could challenge the 1.1060 intermediate support and target the lows around 1.1025. On the upside, the immediate resistance comes at 1.11. Once above this level, the common currency will have to overcome the 1.1150 area in order to alter the short-term technical picture. Apart from the economic data, euro dynamics will be affected by the general risk sentiment in the global financial markets.
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