EUR/USD Analysis: advancing on poor US data, bearish trend intact
|EUR/USD Current price: 1.1298
- Germany barely avoided a technical recession in Q4 2018.
- US December Retail Sales disappointed big, spurring short-term dollar's selling.
The EUR/USD pair consolidated below the 1.1300 figure throughout the first half of the day, peaking for the day at 1.1294. The American dollar remains the strongest currency across the FX board, lacking follow-through ahead of Wall Street's opening. European data was mixed, leaving the shared currency on the weak side, as German's preliminary estimate of Q4 GDP showed the economy didn't grow in the three months to December. The same estimate for the whole EU resulted at 0.3%, slightly better than the 0.2% expected.
The US just released December Retail Sales, a huge disappointment that sent the greenback lower. According to the official release, sales dropped 1.2% monthly basis, while the Retail Sales control group came in at -1.7%, well below the 0.4% advance expected. The country also released January producer prices, with the core readings up by 0.3% MoM and by 2.6% YoY. Weekly unemployment claims rose to 239K for the week ended February 8, largely surpassing estimates 225K.
The EUR/USD pair jumped above 1.1300 with softer-than-expected US data and could extend the current advance according to technical readings in the 4 hours chart, as the price is surpassing a still bearish 20 SMA, while technical indicators head north, the Momentum crossing above its mid-line and the RSI currently at around 48. Nevertheless, the dominant bearish trend remains firmly in place. The pair can extend its recovery up to the 1.1340 price zone, should it break above 1.1310, or turn bearish on renewed weakness below 1.1260, the immediate support.
Support levels: 1.1260 1.1215 1.1180
Resistance levels: 1.1310 1.1345 1.1380
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