EUR/USD Outlook: Euro in Defensive after Surprise Retail Sales Beat Inflates Dollar

Technical analysis of Forex market

The Euro fell in early US trading on Tuesday after massive US retail sales surprise (May 17.7% vs Apr -14.7 and 8.0% f/c) inflated dollar. Significantly better than expected data sideline expectations for Fed introducing negative interest rates that would further boost the greenback, as markets expect fresh signals from Fed’s Powell testimony today.  Fresh weakness returned below 10DMA (1.1302), threatening to damage positive signals from Monday’s bullish engulfing and close above 10 DMA. The single currency could be hurt more if it drops to pivotal support at 1.1212 (Friday’s low/Fibo 38.2% of 1.0870/1.1422),
South-heading momentum, RSI and stochastic support the notion, however, larger bullish structure will remain intact while 1.1212 support holds that would suggest prolonged range-trading (1.1212/1.1422). Only return and close above 10DMA would revive bullish bias and shift near-term focus higher.

Res: 1.1302; 1.1353; 1.1403; 1.1422
Sup: 1.1240; 1.1212; 1.1160; 1.1146

– advertisement –