EUR/USD: Bulls need a weak US Retail Sales data


  • EUR/USD looks south as coronavirus growth weakens risk appetite. 
  • The US-German bond yield spreads are rising in a USD-positive manner. 
  • A big miss on US Retail Sales is needed to put a floor under EUR/USD. 

EUR/USD has declined by 1% so far this week and looks set to extend losses unless the US data disappoints expectations. In that case, the dollar may face selling pressure, putting a floor under the currency pair. 

Coronavirus concerns weigh

Fears that the Eurozone economy would be hit hard by the coronavirus resurgence is pushing the US-German yield differentials higher and weighing over the common currency. 

The 10-year spread has risen to 134.4 basis points, the highest level since March. The two-year yield differential, which is more sensitive to short-term interest rate and inflation expectations, is also widening in a USD-positive manner. 

As such, the path of least resistance for the EUR/USD pair appears to be on the downside. 

Focus on US data

As represented by Retail Sales, consumer spending in the world's largest economy is expected to have risen by 0.7% month-on-month in September following August's 0.6% rise. 

A weaker-than-expected data will likely revive concerns regarding the US economy's health and trigger a broad-based decline in the dollar – more so, as Washington continues to remain deadlocked over a new round of fiscal stimulus. 

The focus will also be on the US Industrial Production and Michigan Consumer Sentiment data due for release later today. Meanwhile, the Eurozone Trade Balance and Consumer Price Index, due at 09:00, may not have a big impact on the EUR pairs. At press time, the pair is trading largely unchanged on the day near 1.17.

Technical levels

EUR/USD

Overview
Today last price 1.1703
Today Daily Change -0.0005
Today Daily Change % -0.04
Today daily open 1.1708
 
Trends
Daily SMA20 1.1738
Daily SMA50 1.1795
Daily SMA100 1.1597
Daily SMA200 1.1278
 
Levels
Previous Daily High 1.1758
Previous Daily Low 1.1688
Previous Weekly High 1.1831
Previous Weekly Low 1.1706
Previous Monthly High 1.2011
Previous Monthly Low 1.1612
Daily Fibonacci 38.2% 1.1715
Daily Fibonacci 61.8% 1.1731
Daily Pivot Point S1 1.1679
Daily Pivot Point S2 1.1649
Daily Pivot Point S3 1.1609
Daily Pivot Point R1 1.1748
Daily Pivot Point R2 1.1787
Daily Pivot Point R3 1.1817

 

 

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