The EURUSD continues to push higher on the day after lower than expected US Retail Sales and Core Retail Sales figures hit the newswires. The EURUSD is currently trading at 1.10565 (as at the time of writing this), as the daily candle pushes strongly above the down sloping price channel that has contained price action since July 2019.
US Retail Sales and Core Retail Sales (retail sales ex autos) came in worse than expected.
Retail Sales registered at -0.3%, which was worse than the consensus number of 0.3%, and well below the last figure of 0.6%. The core component of the report registered at -0.1%, which was below the 0.2% market estimate and also well below the 0.2% figure that was registered previously. The deviations were enough to significantly weaken the USD in its pairing with the Euro.
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EURUSD Intraday Technical Outlook
EURUSD has violated the channel but the daily candle needs to close with a 2% penetration or at least have a double candle close above the channel’s upper border to confirm a break. Anything short of this may be a stop hunt by institutional players, especially as price is now butting against a resistance level. This resistance level (1.1065) is a site where price previously found support, as shown by the lows of July 31, August 16 and August 20. Price also found resistance at the same area between September 9 and 15, and also on October 11. Given the fact that the Euro has not had significantly bullish fundamentals in a while, this area may pose serious headwinds for price action.
If price is able to scale above 1.1065, this opens the door for price to attain the August 27/September 13 highs of 1.11131. Above this level, the highs of July 31 and August 26 (1.11647) come into focus.
Failure to break the 1.1065 resistance level will lead to a retest of resistance at the upper channel border. A return of price into the channel could invalidate further upside moves.