EUR/USD shows signs of bullish turnaround ahead of US Retail Sales data


  • EUR/USD's daily candlestick arrangement shows an impending bullish reversal.
  • A close above 1.1087 is needed to confirm a bearish-to-bullish trend change.
  • A bullish close may remain elusive if the US data blows past expectations.

EUR/USD seems to have carved out an interim bottom ahead of the release of the key US data.

The currency pair charted a bullish outside bar candlestick pattern, which occurs when the day begins on a pessimistic note, but ends with optimism, engulfing preceding day's price action.

Thursday's bullish outside bar candle engulfed the price action of the preceding six days and has appeared at the bottom of an established downtrend.

Hence, it suggests an impending bullish reversal. The trend change, however, would be confirmed if the pair ends today above Thursday's high of 1.1087.

A bullish close could be seen if the US data, due for release at 12:30 GMT, shows the consumer spending, as represented by Retail Sales, dropped sharply in August. Retail Sales are forecasted to rise 0.2% month-on-month in August, having risen by 0.7% in July.

A dismal data would bolster recession fears, sending the USD lower across the board. The EUR/USD pair, however, may close below 1.1087 if the retail sales blow past expectations, validating the argument put forward by some observers that the economy is holding up well and the Federal Reserve should not embark on an all-out easing cycle.

Apart from the Retail Sales, the pair may also be influenced by the US Export Price Index and Michigan Consumer Sentiment Index (Sep), scheduled for release at 12:30 GMT and 14:00 GMT, respectively.

The Euroarea Finance ministers will hold a thematic discussion on the quality of public finances and exchange views on initiatives to boost the transparency of the Eurogroup at the Eurogroup and informal ECOFIN meetings in Helsinki, Finland on Friday and Saturday. The EUR may pick up a bid if the finance ministers agree on the need for fiscal stimulus.

As of writing, EUR/USD is trading at 1.1070, having hit a low of 1.1055 in the Asian trading hours.

Technical levels

EUR/USD

Overview
Today last price 1.1070
Today Daily Change 0.0013
Today Daily Change % 0.12
Today daily open 1.1056
 
Trends
Daily SMA20 1.1055
Daily SMA50 1.1134
Daily SMA100 1.1185
Daily SMA200 1.1263
Levels
Previous Daily High 1.1087
Previous Daily Low 1.0927
Previous Weekly High 1.1085
Previous Weekly Low 1.0926
Previous Monthly High 1.1251
Previous Monthly Low 1.0962
Daily Fibonacci 38.2% 1.1026
Daily Fibonacci 61.8% 1.0988
Daily Pivot Point S1 1.096
Daily Pivot Point S2 1.0863
Daily Pivot Point S3 1.0799
Daily Pivot Point R1 1.112
Daily Pivot Point R2 1.1184
Daily Pivot Point R3 1.128

 

 

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