However, this development is unlikely to significantly alter the long-term outlook for the EUR/USD pair.
The major currency pair has retraced and is now consolidating, with the current EUR/USD exchange rate at 1.1230.
EUR/USD has shed some of its overbought status after reaching the yearly high of 1.1280. From a market perspective, this adjustment doesn't bring about substantial changes: the US dollar remains weak due to the anticipation of Federal Reserve decisions regarding interest rates.
Yesterday, the US presented mixed economic data. For instance, retail sales in June increased only by 0.2% month-on-month, falling short of the forecasted 0.5%. This could be attributed to a seasonal decline in demand. On the other hand, retail prices remain high, which has been curbing buyer activity.
Industrial production volume also continued to decline, with the indicator dropping by 0.5% month-on-month, matching the figures from May. Production is decreasing due to uncertainties surrounding sustained demand at current price levels.
Today's focus should be on the final inflation statistics for the eurozone in June. The indicator is expected to remain at 5.5% year-on-year. In the evening, the US will publish the report on new housing starts for the previous month.