Positive US Data Keeping the Downtrend Going for the EUR/USD
The global economy has improved considerably after the crash that we saw in spring last year, particularly since January. The European and UK economies are surging, but the US economy was the first to show incredible strength, immediately after the lockdowns, and it has been going strong since then, increasing the pace of expansion across all sectors.
Now, the FED is being forced to accept the reality, which they did in the last meeting. Jerome Powell’s remarks this week were a bit soft, as he tries to play down the economic boom and attempts to extend the free cash as long as possible, but he knows the FED will probably be forced to start hiking rates next year, as inflation is surging too.
The 50 SMA is also keeping the EUR/USD bearish
Today, the retail sales report was expected to show a decline, but the figures came up positive, which is giving the USD another push higher, keeping the pressure in the EUR/USD bearish. The 50 SMA (yellow) is also keeping the EUR/USD bearish, since it has been providing resistance for nearly two weeks. Below is the US retail sales data for June:
June 2021 US retail sales data
Retail sales turned positive in June, after dipping in May
- US June retail sales +0.6% vs -0.4% expected
- May retail MoM sales were -1.3% m/m (revised to -1.7%)
- Core retail sales ex autos +1.3% vs +0.4% expected
- Prior ex autos -0.7% (revised to -0.9%)
- Retail sales control group +1.1% vs +0.4% expected
- Retail sales ex auto and gas +1.1% vs -0.8% prior
- Ex autos/gas/building materials/food services +1.1% vs -1.4% prior
- Full report
Key Categories (M/M):
- Food services and drinking locations +2.3%
- Non-store retailers (online) +1.2%
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