The economic data released today in the first half of the day did not impact much on the euro. Investors got to know outlooks for advanced EU countries that also did not shake the euro's strength. The highlight of the day is a weekly update on the US labor market.

According to Insee, the pandemic-related headwinds are still weighing on a pace of recovery in Europe. The positive sign is that consumer activity revived after lifting lockdown measures. Improvement in the labor market and prospects of growing employment also cement consumer sentiment. Today, a report on business sentiment in France showed the positive trend. Besides, the sentiment index in the manufacturing sector jumped to 82 in July from 78 in June. Nevertheless, the indicator still stands below the long-term average of 100. The actual figure slightly undershot expectations as economists had projected an increase to 83. Despite a moderate growth, the sentiment indicator has got stock at lows in all sectors. The risk of the 2^nd pandemic wave could worsen the situation.

Among meaningful reports posted today, Citi experts published their outlook for advanced EU countries.

They reckon that Germany's GDP could shrink 5.7% this year. Germany's national economic output is likely to slump 10% in Q2 2020. The recovery will be backed by the manufacturing sector which is expected to revive to the pre-crisis level in Q3. Exports have to go a long way to recovery. On the whole, Germany's economy is sure to regain footing rapidly.

Considering economic cycles, the havoc in the labor market is viewed as the main culprit to stall the recovery. Experts predict that the unemployment rate in Germany will reach its peak in 2021. At present, economists find it complicated to assess the actual conditions in the labor market amid solid financial aid to households from the government.

When it comes to France, its GDP is expected to nosedive 8.6% in 2020. France's economy could plunge over 14% in Q2. Experts think that personal savings amassed during the pandemic will assure consumers to buy items with high price tags. A lot will depend on consumer sentiment which could turn sour due to the second pandemic wave.

Spain which relies on considerable financial aid from the EU rescue fund is ranked at the bottom of the list of the countries with the worst prospects. According to expert estimates, its GDP is set to suffer the most among other EU countries amid the COVID-19 pandemic which dealt a devastating blow to Spain's travel business. Experts at Citi reckon that Spain's GDP could fall 9% in 2020. Another trouble to tackle is soaring unemployment which is expected at 17% in early 2021.

The technical picture of EUR/USD is telling us the following. Amid muted growth of risky assets, the euro failed to surpass the level of 1.16 versus the US dollar today. Now speculators are pausing for thoughts, thinking of their further trading strategy. Indeed, a sharp rally of the euro without solid fundamentals could be over pretty soon. A breakout at near resistance of 1.1600 will open the door to testing the highs of 1.1650 and 1.1710. Alternatively, if the euro comes under pressure again amid a correctional decline, the first major support is seen at 1.1510. However, even a breakout of this level will hardly spook new EUR buyers which will rush into long deals after the currency pair declines to support of 1.1460 where there is the lower border of the current downward channel.