The EUR/USD pair stayed in its current range, but a weakening of the U.S. dollar pushed it higher just below the current resistance. The market’s focus was once again shifted to the developments in the U.S. and issues related to international trade policy. Support is set at 1.23, resistance at 1.24.
We haven’t seen any important news in Europe and the markets were mostly focused on the developments in the U.S. where advance retail sales numbers were released. The headline figure came above the expectations for the first time in three months. Month on month retail sales grew by 0.6% while 0.4% was expected and -0.1% was seen last month. It’s worth noting, that sales excluding autos and gas have been weaker-than-expected and the reading came at 0.3% against the expected 0.4%.
The reading was quite upbeat, but haven’t influenced the greenback and were unable to bring some support for the currency as as the market participants focused on geopolitical issues. The tense relations between the U.S. and China and Russia are still being closely watched by investors. On Monday President Donald Trump accused both Russia and China of devaluating their currencies even though the last drops of rouble was caused by new U.S. sanctions and the yuan has been strenghtening in the last few months. In effect we’ve seen a selloff of the greenback and the dollar index dropped by 0.4% to the levels around 89.430.
Pic.1. EUR/USD chart.
The EUR/USD pair stayed in its current range amid the weakening of the greenback and and geopolitical tensions, but moved towards the resistance at 1.24. ZEW economic sentiment reading will be the main release of the day. Strong numbers may support the euro and bring an attempt to break above 1.24 level.