EURUSD, H1
US Retail Sales rose 0.5% in June, and are 0.4% higher excluding autos. The 0.8% gain in May autos was revised up to 1.3% (though April was nudged down to 0.3% from 0.4%), with the 0.9% ex-auto figure boosted to 1.4%. The in-detail report was all about the upward revisions to May, which made for a stronger than expected release. Meanwhile, US July Empire State manufacturing index fell 2.4 points to 22.6, reversing about half of the 4.9 point increase to 25.0 in June. The index was at 12.7 last July.
The Dollar was little changed after the in-line retail sales, and slightly better than forecast Empire State index, leaving EURUSD idling near 1.1715. In general, the Dollar has traded lower so far today, which has pushed the narrow trade-weighted USD index down 0.3% to a 3-session low. The US currency also posted losses against the Pound, Swiss Franc and other currencies, although the Yen was an exception.
EURUSD edged out a high of 1.1724, which is the loftiest level seen since last Wednesday. The moves reflect a dynamic of general weakness in the Dollar rather than Euro-specific advances, with the common currency having posted declines against the Swiss Franc.
There is an overall bearish view of EURUSD based on strong US economic growth and the Fed’s tightening course, while any move from Trump to follow-through on hits threats to tariff car imports — which he looks to be gearing up for, describing the EU as a “foe” over the weekend — would presumably be negative, or more negative, for the Euro relative to the Dollar. Additionally, focus is also on the start of the US-Russian summit, with a galaxy of thornier issues lurking beneath the pleasantries.
EURUSD has Support between 38.2% Fib. level set since June 28 and the latest low hourly fractal, at 1.1680-1.1690. If the price slips below 1.1680, then this could suggest a move towards the 1.1630-1.1650 area.
Resistance comes at the 23.6% Fib. level and latest up fractal at 1.1730. If the pair successfully breakout resistance, should retest 1.1758 peak.
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Andria Pichidi
Market Analyst
HotForex
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