EZ Retail Sales Beat Unable to Deter 20-Year Lows on EUR/USD

EUR/USD TALKING POINTS

  • Euro Retail Sales (MAY) – ACT: 0.2%; EST: -0.4%
  • Recessionary fears.

EURO FUNDAMENTAL BACKDROP

The euro did little in the way of recovery after better than expected retail sales data for May, partly due to the fact that the print is the lowest since August 2021. Couple that with the current recessionary backdrop gripping markets after the 2s10s yield curve inverted, markets remain ‘risk-off’.

EUR/USD ECONOMIC CALENDAR

Source: DailyFX economic calendar

TECHNICAL ANALYSIS

EUR/USD DAILY CHART

eurusd daily chart

Chart prepared by Warren VenketasIG

EUR/USD has now slumped to 20-year lows pushing below the 2017 swing low at 1.0340 yesterday, and now looking towards the July 2002 swing high at 1.0210 post-announcement.

Because most markets are overextended at this point including EUR/USD, we may see support holding at 1.0210 and potentially a short-term pullback towards 1.0340.

Resistance levels:

Support levels:

  • 1.0210 (2002 swing high)
  • 1.0064

IG CLIENT SENTIMENT DATA: MIXED

IGCS shows retail traders are currently LONG on EUR/USDwith 75% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however due to recent changes in long and short positioning we arrive at a short-term judgment disposition.

Contact and follow Warren on Twitter: @WVenketas

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