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Euro Rebound Stalls Above 1.1500 After Disappointing Eurozone Retail Data
Traders' Opinions
Summary:
The euro staged a mild rebound above 1.1500 on Thursday, supported by improved market sentiment, but weak Eurozone retail sales data and lingering doubts over a Federal Reserve rate cut kept gains limited.
Buy
CLOSEDEURUSD
End Time
1.15400
Entry Price
1.16200
TP
1.15000
SL
1.15468 -0.00170 -0.15%
199
Points
Profit
1.15000
SL
1.15599
CLOSING
1.15400
Entry Price
1.16200
TP
The euro (EUR) traded modestly higher against the US dollar (USD) on Thursday, with EUR/USD holding slightly above the 1.1500 mark after recovering from a three-month low earlier this week. However, the single currency’s rebound lost momentum near 1.1525, weighed down by disappointing Eurozone retail figures that reinforced concerns about the bloc’s fragile consumption outlook.
The recovery in the euro followed a more optimistic tone across global markets, as investors’ anxiety over the US technology sector eased and a round of better-than-expected European corporate earnings brightened sentiment around the region’s growth trajectory. Yet, macroeconomic data continued to tell a more cautious story for the Eurozone.
According to Eurostat, retail sales across the Euro area fell 0.1% month-on-month in September, missing expectations for a 0.2% rise and following a downwardly revised 0.1% drop in August. On an annual basis, sales rose 1.0%, in line with forecasts but down sharply from 1.6% in the prior month. The data underscores a subdued household spending environment as consumers remain squeezed by persistent inflation and sluggish wage growth.
For policymakers at the European Central Bank (ECB), the soft retail print reinforces a growing dilemma: while inflation is easing toward target, economic activity remains tepid, suggesting limited room for further tightening. Analysts warn that consumption — traditionally a key growth pillar for the Eurozone — may continue to struggle amid high borrowing costs and stagnant real incomes.
The euro’s recovery also faces headwinds from a stronger dollar, bolstered by upbeat US macro data. On Wednesday, the ADP Employment Report surprised to the upside, signaling robust private-sector hiring. Additionally, the ISM Services PMI indicated ongoing expansion in the world’s largest economy, a combination that has prompted investors to reassess the likelihood of a Federal Reserve rate cut in December.
Market pricing in futures now shows fading confidence in near-term Fed easing, keeping Treasury yields elevated and lending continued support to the greenback. With the dollar regaining traction, the euro’s recent rebound may prove short-lived unless Eurozone fundamentals improve meaningfully.
Attention now turns to a series of Federal Reserve speakers scheduled throughout the day, whose remarks will be closely parsed for any shift in tone following the strong employment and services data. If policymakers maintain a hawkish stance, the dollar could find renewed strength, pushing EUR/USD back toward its recent lows.
From a broader perspective, investors remain wary of diverging economic trajectories between the US and the Eurozone. The US economy continues to display resilience despite high interest rates, while Europe struggles to escape stagnation. The contrast in growth momentum and monetary outlooks has been a recurring theme driving EUR/USD lower over recent months.
Technical Analysis
From a technical standpoint, EUR/USD remains under moderate bearish pressure despite its recent uptick. The pair’s price action shows a cautious attempt to correct the dominant downtrend on the short-term chart. However, the recovery appears limited as the pair continues to trade below the 50-day Exponential Moving Average (EMA50) — a key resistance zone that continues to act as a cap on upside momentum.
Momentum indicators suggest that the rally may be running out of steam. The Relative Strength Index (RSI) has entered overbought territory, signaling the potential for near-term consolidation or a corrective pullback. Moreover, a negative divergence between price movement and momentum oscillators hints at fading bullish strength.
Should selling pressure resume, initial support lies near 1.1470, followed by 1.1420, the recent multi-month low. A break below these levels would open the door toward 1.1350, reinforcing the broader bearish bias. On the upside, sustained strength above 1.1525 could trigger further gains toward 1.1575 and 1.1620, though such a move would likely require either weaker US data or a more dovish tone from Fed officials.
TRADE RECOMMENDATION
BUY EURUSD
ENTRY PRICE: 1.15400
STOP LOSS: 1.15000
TAKE PROFIT: 1.1620
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