EUR/USD ignores upbeat German Retail Sales near 1.0850 as Eurozone HICP, Fed’s favorite inflation loom

• EUR/USD takes offers to refresh weekly low, mildly offered of late.
• Germany’s Retail Sales rose but Import Price Index appears mixed for May.
• US Dollar regains upside momentum as markets become active after lackluster Asian session.
• Eurozone, HICP, CPI and US Core PCE Price Index will be crucial considering hawkish ECB, Fed.

EUR/USD renews weekly bottom around 1.0850 as it prints a three-day downtrend despite upbeat German Retail Sales. That said, the Euro pair’s latest fall could also be linked to the US Dollar’s broad recovery amid the early hours of Friday’s European session.

German Retail Sales improved to -3.6% YoY in May versus -4.3% expected and prior readings whereas the monthly figure also rose past 0.0% expected to 0.4% figure, compared to 0.8% previous readings. However, the Import Price Index flash mixed signals as it improves on MoM to -1.4% but deteriorates to -9.1% on YoY.

It’s worth noting that the Western market’s active performance and the previous day’s hawkish comments from Fed Chair Jerome Powell, as well as from Atlanta Federal Reserve President Raphael Bostic, also seem to drown the EUR/USD bears. Additionally, upbeat prints of the US Gross Domestic Product (GDP) Annualized and the Weekly Initial Jobless Claims exert additional downside pressure on the Euro prices.

On the other hand, fears that European leaders will carve out China de-risk strategy and also prepare for the risks to the bloc emanating from Brexit also seem to weigh on the EUR/USD.

Earlier in the week, Eurozone sentiment figures deteriorated and the German inflation clues firmed but the European Central Bank (ECB) officials stays hawkish, at least for July.

Amid these plays, yields rebound and the S&P500 Futures fade the early-day gains.

Moving on, the first readings of Eurozone HICP and Consumer Price Index (CPI) inflation numbers for June will precede the US Core PCE Price Index for May to entertain the EUR/USD pair traders.

Also read: US PCE Preview: Three ways this inflation gauge impacts your income and summer plans

Technical analysis

EUR/USD bears need validation from the 50-Exponential Moving Average (EMA) support of around 1.0850, failing to break the same could trigger a corrective bounce toward a one-week-old descending resistance line, around 1.0940 at the latest.