Disappointing eurozone retail sales report | 07 8月 2024

07 8月 2024, EUR/USD

Disappointing eurozone retail sales report

Event to watch out for today:

17:30 GMT+3. USD - Crude Oil Inventories data from the Department of Energy

EURUSD:

EUR/USD is trading on a weaker note near 1.0915 after pulling back from seven-month highs near 1.1008 during Asian trading on Wednesday. The strengthening of the US dollar (USD) is largely contributing to the major pair's decline. Investors await the release of German trade balance and industrial production data for June, due later in the day.

A recovery in risk sentiment and high US Treasury yields provide some support for the USD. However, investors are expecting more aggressive rate cuts by the Federal Reserve (Fed) starting in September. This, in turn, could limit dollar gains and create a tailwind for EUR/USD. Meanwhile, markets estimated the probability of a 50 basis points (bps) Fed rate cut in September at 69.5%, up from 13.2% last week, according to CME's FedWatch tool.

In the U.S., the trade deficit narrowed to $73.1 billion in June as the value of exports of goods and services rose the most since the start of this year, the U.S. Census Bureau said Tuesday.

On the other hand, more sluggish Eurozone economic data put pressure on the euro (EUR). Data released by Eurostat on Tuesday showed that retail sales in the eurozone unexpectedly fell 0.3% in June versus a 0.5% rise earlier. The market consensus was for a 0.1% increase.

Trading recommendation: Trade predominantly with Sell orders from the current price level.

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David Johnson
Analyst of «FreshForex» company
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