Will US Retail Sales shake up euro?
|EUR/USD is listless in the Thursday session. Currently, EUR/USD is trading at 1.1971, down 0.06% on the day.
The euro has enjoyed an excellent month of April, with gains of 2.05%. With US yields on the retreat, the US dollar has lost its momentum which saw it record broad gains in the first quarter. The euro is within striking distance of the 1.20 line, which has psychological significance. Still, this line could be a tough nut for the euro to crack, as it has held since March 4th.
Eurozone growth will be positive in Q1, and the ECB is projecting that GDP gained 1.7% from January-March. Still, a sluggish vaccine rollout in the EU has stunted growth and could weigh on the euro as well. The EU bet on the AstraZeneca vaccine to supply to its residents, and this move has backfired badly, with nagging concerns that the vaccine may be linked to blood clots. On Wednesday, Denmark became the first EU member to ban AstraZeneca vaccines; Germany, France and other EU countries have placed restrictions on the use of these shots.
Inflation remains below the ECB target of around 2 percent. Still, with pent-up demand building up, inflation is moving higher. Eurozone CPI rose to 1.3% in March, the first time in 12 months that it was above the 1% level. The ECB has estimated that inflation will reach 1.5% in 2021. Taking a page out of the Fed playbook, ECB President Christine Lagarde has said that she expects any inflation volatility to be temporary, so for now, the ECB is not showing concern about rising inflation levels.
The US dollar has been on the defensive, but that could change on Thursday if retail sales bounce back as expected (12:30 GMT). Retail sales were dismal in February, as the headline and core readings both posted declines. However, the consensus for March stands at 5.7% for the headline read and 5.1% for core retail sales. If the estimates proved to be as good as advertised, we could see the US dollar flex some muscles in the North American session.
EUR/USD technical
-
EUR faces a critical cap at 1.1990, which is protecting the symbolic 1.20 level. Above, there is resistance at 1.2044.
-
On the downside, there is support at 1.1860 and 1.1784.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.