EUR/USD Forecast: Draghi weighs modestly ahead of US Retail Sales
|- US Retail Sales expected to improve from January's slump.
- ECB's Draghi repeats its cautious stance on tightening.
The EUR/USD pair retreated from its daily highs in the 1.2410 price zone following some dovish comments from ECB's Draghi, but the greenback remains weak across the board this Wednesday, with the pair's pullback finding support around 1.2360. Draghi didn't add something new to what the market already knew, saying that the economic recovery has been stronger-than-expected, but adding also that inflation has not yet met their goal. "While we are now more confident than in the past that inflation is on the right track, risks and uncertainties remain," Draghi said. In the meantime, Germany released its final February inflation, which matched market's expectations and had little influence on the price.
The EU will release briefly its Industrial Production figures and Q4 employment data, but market's attention has now shifted to US Retail Sales, expected to have improved in February after the disappointing numbers from January. Sales are expected to be up monthly basis by 0.3%, after an unexpected decline in January of 0.3%, the biggest monthly drop in almost a year. The main reading, Retail Sales Control Group, is expected to come in at 0.4%, from a previous 0.0%.
The EUR/USD pair trades around 1.2380, hovering around the 23.6% retracement of its latest bullish run and still holding above all of its moving averages in the 4 hours chart, which maintains the risk skewed toward the upside. Technical indicators in the mentioned chart have turned lower within positive territory, not enough to confirm further declines ahead but limiting chances of a bullish run now.
The pair will need to surpass its daily high to be able to extend its gains up to 1.2445 first, the high set last week, while beyond it, the next resistance comes at 1.2480. Supports from here come at 1.2360, the daily low, followed by 1.2335, a Fibonacci support and 1.2300.
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