Euro bounces up against the US Dollar despite weak Eurozone Retail Sales data

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The Euro (EUR) is rallying against a weaker US Dollar (USD) in Thursday’s European trading session, reversing Wednesday’s losses and returning to the 1.3630 area at the time of writing.

EUR/USD bounces up from 1.1600 and reaches 1.1630 to reverse Tuesday's losses.
A ceasefire between Israel and Lebanon has hit the safe-haven US Dollar on Thursday.
Eurozone Retail Sales declined beyond expectations in April.

The Euro (EUR) is rallying against a weaker US Dollar (USD) in Thursday’s European trading session, reversing Wednesday’s losses and returning to the 1.3630 area at the time of writing. A moderate improvement in market sentiment following news of a ceasefire in Lebanon has offset the weak Eurozone Retail Sales report released earlier in the day.

The safe-haven US Dollar is struggling on Thursday, following reports of an agreement between Israel and Lebanon to implement the ceasefire, which is pending confirmation by Hezbollah. This agreement is seen as the first step to disentangle the stalemate in Iran and advance towards a durable peace in the region.

A moderate market optimism is keeping the safe-haven US Dollar under pressure and buoying the Euro, which has been unfazed by a 0.4% decline in Eurozone Retail Sales in April. The final data overshoots market expectations of a 0.3% drop, although the upward revision of March’s figures –to a 0.8% increase from the 0.1% drop previously estimated– has contributed to cushioning the negative impact on the common currency.

Technical Analysis: The Euro keeps wavering within range

The broader technical picture, however, remains little changed. The EUR/USD trades at 1.1631, holding in a broadly neutral stance with price action trapped within the last two and a half weeks' trading range, between 1.1570 and 1.1660.

Technical indicators in 4-hour charts are mixed, endorsing the neutral view. The Relative Strength Index (RSI) is right above the 50 midline, while the Moving Average Convergence Divergence (MACD) remains slightly negative.

Upside attempts are likely to find significant resistance at the 1.1660 area, which has been capping bulls since mid-May. Above that level, the next targets are the May 14 high, at 1.1720, and May's peak, in the 1.1790 area.

On the downside, the 1.1600 round level has contained bears this week, guarding the path towards the range bottom, at the 1.1570 level (May 21 low). A confirmation below this level would put April's bottom at the 1.1505-1.1525 on the bears' focus.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Retail Sales (MoM)

The Retail Sales data, released by Eurostat on a monthly basis, measures the volume of retail sales in the Eurozone. It shows the performance of the retail sector in the short term, which accounts for around 5% of the total value added of the Eurozone economies. Retail Sales data is widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the prior month. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish

Economic Indicator

Retail Sales (YoY)

The Retail Sales data, released by Eurostat on a monthly basis, measures the volume of retail sales in the Eurozone. It shows the performance of the retail sector in the short term, which accounts for around 5% of the total value added of the Eurozone economies. Retail Sales data is widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.