The past 48 hours have brought a surging Greenback and moderate correction to the EUR/USD. Rates have fallen from weekly highs above 1.1325 and continue to drive south. Subsequently, several daily support levels are coming into view very quickly.

With the Friday session approaching, it is time to look at a few end of week news items that are likely to impact the EUR/USD. Tomorrow’s economic calendar features the 8:30 AM EST release of U.S. Retail Sales for May. Analysts expect Retail Sales to jump from April’s levels, to 0.6%. In addition, June’s Michigan Consumer Sentiment Index is due to hit newswires at 10:00 AM EST. Industry expectations predict the index to fall to 98, down from 100 (May).

All in all, the next 30 or so hours should be fairly active for the Greenback and EUR/USD.

EUR/USD: Technical Outlook

It has been a tight EUR/USD market today, featuring a slim trading range of 35 pips. Perhaps Friday’s release of U.S. Retail Sales will bring some action to this market.

Here are three levels to watch until Friday’s closing bell:

• Support(1): 62% Current Wave Retracement, 1.1256
• Support(2): Daily SMA, 1.1240
• Support(3): Bollinger MP, 1.1216

Bottom Line: The month-long uptrend in the EUR/USD remains technically intact, but is showing signs of exhaustion. April’s high (1.1323) proved to be a formidable resistance level; perhaps 1.1250 will set up as valid support.

As long as 1.1347 is the Swing High for this market on the daily chart, I will have buys queued up from 1.1256. With an initial stop at 1.1224, this trade produces 25 pips on a sub-1:1 risk vs reward management plan.