EUR/USD cycling 1.05, EU Retail Sales & US ADP Employment Change both miss the mark

The EUR/USD clipped into a fresh daily high of 1.0532 on Wednesday after catching a bounce out of Tuesday's flat range, but Euro (EUR) upside remains limited after economic data for the EU came in mixed with consumer figures missing the mark.

The European Producer Price Index (PPI) for the annualized period into August improved over the forecast -11.6%, albeit slightly, printing at -11.5% against the previous printing of -7.6%. 

European Retail Sales for the same period likewise slipped lower, accelerating to the downside to print at -2.1% against the forecast -1.2%. Annualized European Retail Sales last came in at -1% , signaling an ongoing deterioration in the European economy.

Eurozone Retail Sales fall 2.1% YoY in August vs. -1.2% expected

Officials from the European Central Bank (ECB) hit the newswires on Wednesday, with ECB Vice President Luis de Guindos and Governing Council member Mario Centeno noting that economic activity is likely to remain subdued looking forward. The ECB officials also noted that inflation is declining at a rapid pace throughout the EU, and the rate hike cycle appears to be at the top.

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ECB’s de Guindos: Economic activity likely to remain subdued in coming months

ECB's Centeno: We can expect rate cycle has been completed by now

The US ADP Employment Change missed the mark on Wednesday, printing at 89K versus the forecast 153K, while US Services Purchasing Manager Index (PMI) numbers for September came in as-expected, declining from the previous 54.5 to 53.6.

US Factory Orders for August surprised to the upside, showing a 1.2% increase in activity versus the expected 0.3% and rebounding from the previous showing of -2.1%.

US Factory Orders rise 1.2% in August vs. 0.3% expected

Looking ahead, Thursday will bring comments from the ECB's Lane and De Guindos, while the US side will see Challenger Job Cuts and Initial Jobless Claims. Challenger last printed at 75.151K, while Initial Jobless Claims are expected to increase from 204K to 210K.

Above all else, this Friday will see another turn around the wheel for US Non-Farm Payrolls (NFP), with September forecast to show a slight decline from 187K to 170K.

EUR/USD technical outlook

The EUR/USD is falling back to the 1.0500 major level after getting rejected from the 100-hour Simple Moving Average (SMA) near the day's peak at 1.0532. Intraday action is seeing a resistance cap from the 200-hour SMA that is dropping into 1.0550, and the day's low was marked in early just shy of 1.0450.

On the daily candlesticks, the long-term downtrend remains fully intact; the EUR/USD is down nearly 7%, or 770 pips, from July's top at 1.1275, and the bearish trendline is firmly entrenched as the pair continues to drop away from the 200-day SMA near 1.0825.

EUR/USD hourly chart

EUR/USD daily chart

EUR/USD technical levels