The EUR/USD firmed further on the day after a set of disappointing data from the US dampened sentiment on the US Dollar.
The greenback, still smarting from the Fed’s dovish downplays on the day (as per Cleveland Fed President Loretta Mester’s Bloomberg TV interview), suffered more as US retail sales for April slumped from 10.7% in March to 0.0% in April. The core retail sales number fell even more, dropping steeply from March’s 9.0% to -0.8% in April.
Also adding to the USD’s woes was the fall in Industrial Production from 2.4% to 0.7%. These bearish data empowered bulls on the single currency to add to the EUR/USD’s gains on the day, as it surged 0.53% as of writing.
Technical Outlook For EUR/USD
The 0.53% gain has taken the daily candle within touching distance of the 1.21487 resistance (11 February and 29 April highs). A break above this level takes the pair to the 1.21792 resistance level, marking the highs for the week. It has to take the uncapping of this price level to get the pair towards the 1.22416 price area, with 1.22768 serving as an additional price target to the north.
On the other hand, if the price stalls and undergoes a corrective pullback from 1.21487, we would expect a retest of 1.20890, with 1.20549 lining up as an additional downside target if 1.20890 gives way. The 1.20549 support aligns with the ascending trendline that connects the lows of April and May 2021. A breakdown of this trendline will open the pathway for bears to aim for the 1.2000 psychological support and 1.19472 below it.