EURUSD: Euro to USD Wavers Ahead of US Retail Sales Data – Levels to Watch

The euro to USD (EURUSD) price is little changed in the Asian session as investors wait for US retail sales and Eurozone’s consumer inflation data.

The EURUSD has been relatively weak this week. It has fallen by almost 1% as investors react to the rising Covid-19 cases in Europe. In recent days, the numbers have continued to rise in countries like the UK, Germany, France, Spain, and Italy.

Today, the pair will react to the important consumer price index data from Europe and the US retail sales.

Eurostat will release the EU inflation data at 09:00 GMT. Analysts expect the data will show that the bloc’s consumer prices remained under pressure in September. The median estimate by analysts polled by Reuters is for the headline CPI to rise by 0.1% after contracting by 0.4% in August.

On an annual basis, they expect the consumer prices to fall by 0.3%. At the same time, they expect the core CPI to remain unchanged at 0.2%. While inflation is a major mover of the euro to USD price, I don’t expect that the pair will have an extreme reaction today since the rate is expected to remain low for a while.

The EURUSD price will also react to the US retail sales numbers that will come out at 12:30 GMT. Analysts expect that sales rose from 0.6% in August to 0.7% in September. They also see the core retail sales rising by just 0.5%. These numbers will come a day after we received weak jobless claims numbers from the US.

The weak data comes at a time when divisions in congress have made it difficult for the US to receive a new stimulus, which experts believe is needed to support the economy.

Eur to USD technical outlook

The hourly chart shows that the EURUSD has fallen from a weekly high of 1.1830 to a low of 1.1688 this week. During this decline, the pair has moved below the standard pivot point and below the first support. It has also moved below the 25-day exponential moving averages.

It also seems to be forming a bearish flag pattern, which is an indication that the pair could continue falling. If this happens, the key level to watch will be the second support at 1.1662. On the flip side, a move above the first support at 1.1747 will invalidate this trend.

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EURUSD technical chart

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