EUR/USD demonstrates volatile squeeze above 1.1200 as focus shifts to US Retail Sales
EUR/USD has turned sideways as investors are awaiting a fresh trigger for further guidance. S&P500 futures have generated some losses, portraying caution among market participants as the result season has kicked off. The Euro has got extreme strength as the ECB is expected to conclude its rate-hiking spell beyond July.
The EUR/USD pair has turned extremely choppy above the round-level resistance of 1.1200 in the Asian session. The major currency pair has turned sideways as investors are awaiting the United States Retail Sales (June) data for further guidance.
S&P500 futures have generated some losses in the Tokyo session, portraying caution among market participants as the second-quarter result season has kicked off. US equities also faced some pressure on Friday as investors are worried that corporate earnings could remain volatile due to higher aggressive policy-tightening by the Federal Reserve (Fed) and tight credit conditions by commercial banks to maintain asset quality.
The US Dollar Index (DXY) is demonstrating a squeeze in volatility after building a base marginally below 100.00. The USD Index is expected to deliver a power-pack action after the release of the US Retail Sales data. As per the consensus, monthly retail demand is expected to expand at a higher pace of 0.5% vs. the former release of 0.3%. Retail demand excluding automobiles is seen expanding by 0.3% against the former release of 0.1%.
Meanwhile, the Euro has got extreme strength as the European Central Bank (ECB) is expected to conclude its rate-hiking spell beyond July as inflation is hotter in Eurozone. Headline inflation in the shared continent is at 5.5% and the core inflation that excludes volatile oil and food prices is at 5.4%, stretched from the desired rate of 2%.
Contrary, economists at Nordea believe that the European Central Bank continues to see more tightening warranted, and another hike in July appears a done deal but it will be the last one in the current cycle.