The EUR/USD pair once again failed to break through the 1.0950 important hurdle and has now retreated back to 1.0910 region post US GDP report.
Spot ran through some fresh offers despite of a yet another disappointment from the US macro that showed economy recorded a tepid growth of 0.7% (annualized rate) during the first quarter of 2017. The growth rate was not only worse than 2.1% recorded in the previous quarter but also fell short of 1.2% expected.
Looking at additional details, a higher-than-expected rise in GDP Price Index and Employment Cost remained supportive of inflationary pressure in the economy and prospects for additional Fed rate-hike action through 2017. The expectations were being reinforced by the post-data up-surge in the US treasury bond yields.
Rising bond yields underpinned the US Dollar demand and collaborated to the pair’s retracement from closer to 5-1/2 month tops touched in the aftermath of upbeat Euro-zone CPI print.
Next on tap would be the release of Chicago PMI and Revised UoM Consumer Sentiment, which would now be looked upon for some fresh trading impetus.
“The next strong resistance comes at 1.0950, the weekly high and the level to surpass to see a stronger upward momentum, with 1.1000 and 1.1045 being the next short term bullish targets. 1.0850 on the other hand is the immediate short term support, followed by 1.0820, the weekly low. Below this last, the downside potential will firm up, with scope to extend the decline to 1.0730, where the pair will finally fill the weekly opening gap” writes Valeria Bednarik, Chief Analyst at FXStreet.