EUR/USD in steady trade close to two-week lows

The euro was trading steadily against the US dollar on Friday in proximity to two-week lows, after Thursdays upbeat GDP data out of the United States was still supporting the greenback and the view of a possible asset purchase scale back by the Federal Reserve soon.

EUR/USD touched a session low at 1.3222 at 7:04 GMT, after which consolidation followed at 1.3235. Support for the pair was expected at August 2nd low, 1,3190, while resistance was to be seen at August 29th high, 1.3340.

US dollar received solid support yesterday, set for a third weekly advance, after US Department of Commerce said that the revised Gross Domestic Product expanded by 2.5% during Q2 annually, exceeding expectations of a growth rate of 2.2%, while the preliminary estimate pointed a 1.7% expansion. Additionally, according to data by the Department of Labor, initial jobless claims in the United States dropped by 6 000 to 331 000 during the week ending on August 24th 2013, almost in line with experts’projections of a drop to 332 000 claims. The indicator remained close to its lowest point, recorded in October 2007.

Meanwhile, the euro showed a retreat against the dollar, after earlier today it became clear that German retail sales registered a second monthly drop in July, which implied that retail sellers in the country have achieved mixed results since the beginning of the year. Retail sales decreased by 1.4% in July compared to June, furthering their drop, as in June compared to May they fell 0.8%, according to revised data. This data completely confounded expertsexpectations of a 0.6% increase, with the stable German labor market and strong consumer confidence clearly not giving sufficient support to retail trade. During the first seven months of this year compared to the same period last year retail sales dipped by 0.1%. However, sales rose by 2.3% in July annually, probably because of the fact that July 2013 had one working day more than July 2012. Some analysts think that it is yet too early to project the possible influence of the downbeat retail sales figure upon consumer spending during the third quarter of the year.

Elsewhere, the euro was losing ground against the pound and the yen, as EUR/GBP cross dropped 0.16% on a daily basis to trade at 0.8528 at 7:30 GMT, while EUR/JPY pair erased 0.45% to trade at 129.66 at 7:30 GMT.