EUR/USD seems to have carved out an interim bottom ahead of the release of the key US data.
The currency pair charted a bullish outside bar candlestick pattern, which occurs when the day begins on a pessimistic note, but ends with optimism, engulfing preceding day's price action.
Thursday's bullish outside bar candle engulfed the price action of the preceding six days and has appeared at the bottom of an established downtrend.
Hence, it suggests an impending bullish reversal. The trend change, however, would be confirmed if the pair ends today above Thursday's high of 1.1087.
A bullish close could be seen if the US data, due for release at 12:30 GMT, shows the consumer spending, as represented by Retail Sales, dropped sharply in August. Retail Sales are forecasted to rise 0.2% month-on-month in August, having risen by 0.7% in July.
A dismal data would bolster recession fears, sending the USD lower across the board. The EUR/USD pair, however, may close below 1.1087 if the retail sales blow past expectations, validating the argument put forward by some observers that the economy is holding up well and the Federal Reserve should not embark on an all-out easing cycle.
Apart from the Retail Sales, the pair may also be influenced by the US Export Price Index and Michigan Consumer Sentiment Index (Sep), scheduled for release at 12:30 GMT and 14:00 GMT, respectively.
The Euroarea Finance ministers will hold a thematic discussion on the quality of public finances and exchange views on initiatives to boost the transparency of the Eurogroup at the Eurogroup and informal ECOFIN meetings in Helsinki, Finland on Friday and Saturday. The EUR may pick up a bid if the finance ministers agree on the need for fiscal stimulus.
As of writing, EUR/USD is trading at 1.1070, having hit a low of 1.1055 in the Asian trading hours.


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