Investors who are skeptical about the primacy of the US Dollar argue that after a series of weaker data it will be easier now for positive surprises, and higher prices of energy and other raw materials and improvement in the labor market will globally restore the discussion about monetary tightening in major economies. The problem is that these wishes do not meet for the time being. The last proof is GDP reading from Germany for the first quarter this morning, where growth slowed down to 0.3% (from 0.6% in Q4) against a forecast of 0.4% increase. How to talk about the return of the hawkish transmission of the ECB, when the main motor of growth of the euro zone is holding back? Of course, the discrepancy in the assessment of foundations does not have to be limited only from the rest of the world.

Today in the afternoon, April's US retail sales data will be a test for US dollar strength. Retail sales (excluding cars, food, fuels and building materials) are expected to increase by 0.4%, and total sales - by 0.3%. These are not excessive expectations, but also not low enough to set the bar low for positive surprises. On the one hand, the dollar's position is not as strong as 3 weeks ago, so USD may be more sensitive to disappointment, nevertheless, it is still worth to keep an eye on it.

Let's now take a look at the EUR/USD technical picture at the H4 time frame after the German data were published and US data are still ahead of us. The recent swing low seems to be established at the level of 1.1820 and since then the market has been moving inside of a channel. After today's data release, the price has broken through the lower channel line and currently is trading below it in oversold market conditions. The nearest technical support is seen at the level of 1.1889 - 1.1897 and the intraday resistance is seen at the level of 1.1937. If the US data will disappoint as well, the EUR/USD might return back to the channel again and move towards the level of 1.1990. Otherwise, the test of the level of 1.1889 is unavoidable.