EUR/USD ticks higher as US Dollar languishes awaiting delayed data

• The Euro maintains a moderate bid tone against the US Dollar and consolidates near 1.1650.
• Hawkish comments by Fed officials have failed to support a weak Greenback.
• Eurozone GDP data is expected to confirm that the economy grew at a 0.2% pace in Q3.

EUR/USD extends gains for the eighth consecutive day on Friday, trading at 1.1640 at the time of writing on Friday, on track for a 0.6% rally this week. The pair has drawn support from a weaker US Dollar, with investors anticipating a raft of weak economic data next week, as US authorities will release the macroeconomic figures delayed due to the government shutdown.

Federal Reserve (Fed) policymakers, however, showed reluctance to ease monetary policy further on Thursday. St. Louis Fed President Alberto Mussalem and Cleveland Fed President Beth Hammack were more concerned about the risks of inflation than about the labour market's momentum, while Minneapolis Fed President Neel Kashkari delivered a more neutral message.

The US Dollar's weakness offset the negative impact of a disappointing Eurozone Industrial Production report. This Friday, the focus shifts to the second reading of the Q3 Eurozone Gross Domestic Product, while in the US, more speeches from Fed officials will provide the fundamental guidance for the Greenback.

Daily digest market movers: Euro remains buoyed on US Dollar weakness

• The Euro is going through a two-week rally, supported by US Dollar weakness rather than positive Eurozone data. Investors have been cautious about placing large US Dollar longs amid the economic data blackout, and so far, unfazed by the hawkish comments from Fed officials. The release of a backlog of delayed figures next week will clarify the picture of the US economy and is expected to set the US Dollar's direction.
• On Thursday, Fed's Hammack said that monetary policy is currently barely restrictive, and that interest rates need to be at levels that help to reduce inflation, suggesting that she will be against an interest rate cut in December.
• St. Louis Fed President Alberto Mussalem showed a similar view, pointing to inflation as the central bank's main concern and affirming that the Fed has "limited room to ease without becoming overly accommodative".
• Also on Thursday, Fed's Kashkari pointed to a resilient US economy in an interview at Bloomberg and urged caution with further monetary easing. Regarding December's meeting, Kashkari said that he is still undecided but that he does not have a strong inclination for an interest rate cut.
• In Europe, the Eurozone's Industrial Production figures showed a 0.2% growth in September, following an upwardly revised 1.1% decline in August. Year-on-year, factory activity remained expanding at a steady 1.2% pace, figures well below market expectations of a 0.7% monthly growth and a 2.1% yearly improvement.
• On Friday, the Eurozone GDP is expected to confirm the preliminary data, revealing a 0.2% quarterly expansion and a 1.3% economic growth in the last 12 months.

Technical Analysis: EUR/USD remains above the channel, with 1.1670 on sight

EUR/USD broke the top of a descending channel from early October highs and is consolidating gains on Friday. Technical indicators are positive, but the 4-hour Relative Strength Index (RSI) is nearing overbought conditions after rallying continuously for the last eight days. The Moving Average Convergence Divergence (MACD) in the same timeframe seems likely to cross below the signal line. All in all, signals hinting at some consolidation might be ahead.

Bulls should remain above the channel top, currently around 1.1610, to confirm a trend shift, and keep the October 28 and 29 highs, near 1.1670, in focus. Further up, the target is the October 17 high, near 1.1730. A correction below the mentioned trendline, at 1.1610, on the other hand, is likely to seek support at the November 12 low, in the vicinity of 1.1575, ahead of the 1.1530-1.1540 area (near November 7 and 10 lows).