- EU data came in-line with expectations, growth steady at 0.6% in Q4.
- US Retail Sales and CPI to dominate the American session.
The EUR/USD pair surged to 1.3292 during the Asian session, as dollar's weakness prevailed, but retreated sharply early London, despite European data released earlier today was generally encouraging. The German economy grew by 0.6% in the three months to December, according to preliminary estimates, meeting market's expectations. Yearly basis, it grew by 2.3%, slightly above 2.2%. Inflation in the country fell by 0.7% in January steady at 1.6% yearly basis. The EU Q4 GDP also matched market's expectations and came in at 0.6%, while Industrial Production surprised to the upside, beating expectations and up for the month 0.4%.
The main focus today are US retail sales and inflation figures, to be released ahead of Wall Street's opening. Sales are expected to have posted a modest advance in January of 0.2%, while inflation, yearly basis, is seen at 1.9% from previous 2.1%.
The 4 hours chart for the pair shows that the pair stalled right at the 23.6% retracement of the January rally, after bottoming around the 50% retracement of it last week. The pair is now below a 100 SMA, but above a bullish 20 SMA, this last converging with another Fibonacci level around 1.2300. Technical indicators in the mentioned chart have turned sharply lower within positive territory, suggesting the downward corrective movement could continue on a break below 1.2340, the immediate support, with scope then to test 1.2300. Below this last, the next support comes at 1.2260. Above 1.2400, on the other hand, the pair has room to extend its advance up to the 1.2440/50 region, en route to 1.2480, this last a strong static resistance.
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