- EUR / USD becomes positive and wins peaks over 2 days.
- Weak retail sales in the United States are undermining the dollar’s momentum.
- Friday, the sentiment of American consumers will be on display.
EUR / USD quickly surpassed the previous consolidation theme and reached the zone of the highest in 2 days in the 1.0845 / 50 band, which renewed the sales pressure.
Stronger EUR / USD post / US data
EUR / USD managed to reverse the initial pessimism and regained the upper hand after selling pressure around the greenback gained ground following the release of ugly data.
Indeed, the American title Retail sales April contracted significantly by 16.4%, while basic sales also fell 17.2%, with both runs exceeding previous expectations.
On the less negative side, American industrial production contracted by 11.2% per month over the same period (against an expected contraction of 11.5%), capacity use fell less than expected to 64 , 9% and the NY Empire State index rebounded to -48.5 for the current month (from April -78.2).
Later in the file, the preliminary impression of consumer sentiment for the current month will close the weekly calendar.
What to look for around the EUR
EUR / USD is struggling to close the week in positive territory and above the 1.0800 mark. The poor results of the national fundamentals showed the first effects of the coronavirus crisis on the region’s economy, although these were largely anticipated by market players and thus somewhat mitigated the impact on the currency . In the meantime, the solid position of the eurozone current account coupled with the gradual reopening of the economy maintain a more marked decline in the somewhat contained pair for the moment.
EUR / USD levels to watch
For the moment, the pair is gaining 0.36% at 1.0843 and a break above 1.0896 (weekly high on May 13) would target 1.0940 (55-day SMA) en route to 1.1019 ( May 1 monthly high). On the other hand, the immediate contention emerges at 1.0774 (weekly low of May 14), supported by 1.0727 (monthly low of April 24) and finally 1.0635 (low of 2020 on March 23).