EUR/USD is trading sideways for the second consecutive session as investors await the US retail sales data later today. On Tuesday, the pair was trading at $1.1924, down by 0.05%. Retail sales is one of the major indicators of consumer spending and overall economic growth. In January, the reading of 5.3% was higher than the predicted 1.1%.
Analysts expect the retail sales to have dropped by -0.5% in February amid inflation concerns. A higher-than-expected figure is likely to strengthen the greenback, thus weighing on the EURUSD.
The EURUSD will further react to Germany’s ZEW economic sentiment index. With Germany being the largest economy in the Europe, the country’s six-month economic outlook will impact the euro. Experts expect a reading of 74.0, up from last month’s 71.2.
Investors are also keen to see if the trend will also be replicated in the larger eurozone. However, bullish ZEW index figures are likely to prevent the currency from dropping further against the greenback as opposed to pushing it higher.
EURUSD technical outlook
On a 4-hour chart, EUR/USD is trading below the 20 and 50-day exponential moving averages. However, with reference to the 20-day EMA, the prices are slightly below it. Besides, the currency pair is below the upper and middle bands of the Bollinger bands.
Based on these technical indicators, EURUSD is likely to remain under pressure. If the awaited data is in favour of the USD, the bears will test last week’s support level of about $1.1887 and further down to that week’s lowest point of around $1.1837.
On the flip side, the bulls will be targeting yesterday’s high of $1.1971 and last week’s high of $1.1991.
EURUSD chart
