Ella 
EUR/USD remained under pressure near 1.0845 on Friday as traders awaited top US data. The pair struggled to find clear direction after posting its biggest drop in five weeks the previous day.
Eurozone inflation data the day before were generally optimistic, but the relative stance in four months challenged the ECB’s hawkish tendency.
On Thursday, the Eurozone’s favored inflation indicator – the monthly adjusted inflation rate in August – rose to 0.6%, compared with expectations of -0.1%. The annual rate was still recorded at 5.3%, compared with market estimates of 5.1%. “Over the past four months, the average monthly increase in the adjusted inflation rate has fallen to 0.2%, and the average monthly increase in the first four months of this year was 0.6%,” ANZ said after the data was released.
In addition, German retail sales in July fell by 0.8% month-on-month, and the market expected 0.3%. The annual rate was even more disappointing, falling from -1.6% to -2.2%, and the market expected -1.0%.
After the data was released, the ECB meeting minutes reduced hopes of any surprises from the central bank, weighing on the euro/dollar. In contrast, ECB policymaker Robert Holzmann issued hawkish comments and Isabel Schnabel issued a neutral speech.
On the other hand, the Fed’s preferred inflation gauge, the U.S. core personal consumption expenditures (PCE) price index in August, was in line with market forecasts, at 4.2% annual and 0.2% monthly, respectively, compared with 4.1% and 0.2% in the previous month. In addition, the number of first-time jobless claims in August fell to 228,000 from the previous 232,000 (revised), while the market forecast was 235,000; the Chicago Purchasing Managers Index rose to 48.7 in August, compared with expectations of 44.1, and the previous value of 42.8 . In addition, personal spending rose to 0.8% in July from the 0.6% expected and the previous value, while personal income fell to 0.2% from the market forecast of 0.3% and the previous value.
Amid these factors, U.S. 10-year and two-year Treasury yields remained near their lowest levels in three weeks, while U.S. stock futures were mixed after the close on Wall Street, with smaller losses. With this in mind, EUR/USD bears are likely to be in trouble ahead of the data, while barring any major surprises in US non-farm payrolls and unemployment, the early details are positive for EUR buyers.
