Positive US economic data weighs on EUR/USD
James Chen December 11, 2014 7:25 PM
<p>US retail sales data for November was released on Thursday morning. Retail sales climbed by the highest amount in over eight months, significantly beating expectations. […]</p>
US retail sales data for November was released on Thursday morning. Retail sales climbed by the highest amount in over eight months, significantly beating expectations. The 0.7% gain in retail sales exceeded analysts’ consensus forecast of 0.4%. In addition, October retail sales were revised from a previously reported 0.3% up to 0.5%.
Lending to the upbeat US retail sales environment in recent months has been the positive employment picture as well as declining fuel prices.
The immediate reaction to the retail sales data, as well as unemployment claims data, was a rise in the major index futures in pre-market trading, as well as a US dollar advance against other global currencies. After the initial reaction, the US dollar subsequently began a further rally.
EUR/USD was trading slightly above 1.2400, near its new two-year low of 1.2246 that was just established earlier in the week. After the data release, price action spiked down below 1.2400.
On a longer-term basis, the currency pair continues to trade within a strong bearish trend that has been in place since early May. In the face of continued US dollar strength and positive US economic data, EUR/USD appears poised to continue this bearish trend towards further lows.
Any re-break below the 1.2300 level and the noted two-year low could push the currency pair further down toward its next major target around 1.2040.
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