EUR/USD ohfx very tight range up to 1.1550 sharp bear for euro. This crazy movement comes on the heels of mixed economic data being released from the United States as well as Germany. Following the release of really bad US retail sales data, the pair shot up above 1.1581. Soon thereafter, it retreated back down to roughly 1.1560. Markets are still digesting the ramifications of last week’s economic reports. As they take steps, the outlook for the EUR/USD looks moderately positive, with a bias to the upside.
After all, on Tuesday, the EUR/USD barely moved anywhere at all, showing volatility confined to a near perfectly horizontal 20-day Simple Moving Average (SMA). The duo surged to a new intraday high of 1.1571. It was hard to keep that energy going and the stock soon languished back down to where it’s trading today. As with the last time around, analysts are commenting that the pair is facing heavy resistance at this level. It remains well above the bullish 100 and 200 SMAs, showing underlying strength.
The latest US news showed one of the biggest drops on record in retail sales, which plummeted 0.9% in May. This one-year figure marks a remarkable turnaround from a prior drop of only 0.1%. It even beat forecasts that were looking for a 0.7% decline. This weaker-than-expected performance underscores the question of consumer spending and whether it will drive a recovery in the wider economy.
Germany’s economic sentiment unexpectedly perked up. The ZEW Economic Sentiment index jumped to 47.5. This is a huge leap from last month’s reading of 25.2 and well above the anticipated number of 35. German investors are increasingly confident that the worst of the economic squeeze is behind them. This unanticipated development would be enough to send the euro soaring against the dollar.
As the EUR/USD continues to bounce within this narrow trading band, EUR/USD traders are closely watching support areas at 1.1530, 1.1490, and 1.1440. These levels provide an important signal to the market and regulators. That allows them to identify potential points of entry and create targeted risk management strategies with a focus on future economic indicators.
Market analysts are nervously waiting to see how current events in the Middle East will play out. This new reality adds another layer of complexity to currency movements. Geopolitical tensions with U.S. rivals impact investor sentiment, creating demand for currencies that can experience day-to-day volatility.