The US dollar has shown renewed strength after the release of US producer inflation (PPI) data in the New York session yesterday.
The July data reading, which beat expectations, showed the largest increase in the cost of services and goods since June 2022.
The strengthening US dollar has reduced losses from the previous few days and put pressure on the movements of other major currencies in the market.
Looking at the EUR/USD currency pair, the price recorded a new 2-week high of 1.17300 last Wednesday before changing its pattern on Thursday yesterday.
The price dropped below the 1.17000 level again and moved below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the chart yesterday, giving an early signal of a trend change.
Prices fell lower in the New York session as the reaction to the PPI data reached 1.16300 before leveling off towards the end of the session.
Price action remained subdued at the opening of the Asian session this morning (Friday) hovering around 1.16500 with expectations of further declines likely.
Investors will await clues on US retail sales data as well as consumer confidence surveys in the New York session later.
If it falls lower, prices will test the current support level at 1.16000 which successfully held back the price decline earlier in the week.
A break lower would further explain the bearish price movement which risks falling to 1.15000.
On the other hand, if the price manages to make a comeback, resistance is at 1.17000 to be broken before the price continues the bullish pattern of the past few days.
Breaking through Wednesday's high, prices will target a higher rise towards the 1.18000 focus zone.
