Holding Short on EUR/USD After the Rejection at the 20 SMA

Posted Tuesday, May 16, 2023 by
Skerdian Meta • 2 min read

Today, EUR/USD continued its upward correction during the European session, which began yesterday during the Asian session. This moderate upward movement brought the pair closer to its declining 20 simple moving average, represented by the gray line on the chart, which acted as resistance, rejecting the price. Additionally, the pair reentered a range of prices that dates back to April 11, ranging between 1.0895 and 1.0908. It is worth noting that last week, the price reached its lowest point within this range on Thursday.

On Friday, EUR/USD initially found support within this range but eventually broke below it, falling to 1.0840s and remaining below it, indicating a shift in bias towards the downside. We saw a retrace higher since then, but the failure to hold above the 20 SMA today, has maintained the influence of sellers and given them more control over the short and medium-term technical outlook. The US retail sales came in weaker than expected, but that helped the USD further, as fears of a global recession increased.

US April 2023 Retail Sales Report

  • April retail sales +0.4% vs +0.8% expected
  • Prior was -0.6% and adjusted in benchmark revisions (revised to -0.7%)


  • Ex autos +0.4% vs +0.4% expected
  • Prior ex autos -0.4%
  • Control group +0.7 vs +0.3% expected
  • Prior control group -0.3%
  • Ex autos and gas +0.6% vs -0.3% prior
  • Gasoline stations -0.3% vs -5.5% m/m prior
  • Electronics and appliance stores -0.5% vs +2.1% m/m prior
  • Furniture stores -0.7% vs –1.2% m/m prior
  • Restaurants -0.2% vs +0.1% m/m prior

US retail and food services sales saw a modest 0.4% growth in April 2023, as per the advance estimates (which will be revised). This follows a downward revision in the month-over-month change from -0.6% to -0.7% for the February-March period. Despite the slight setback in the previous month, the overall sales from February to April 2023 still marked a solid 3.1% hike from the same period in 2022. to $680.5 billion.

April’s retail trade sales mirrored the broader retail and food services trends, with a 0.4% rise from March 2023 and a 0.5% year-on-year increase. Nonstore retailers, an increasingly significant segment that’s largely online shopping, outperformed with a substantial 8.0% growth compared to last year and +1.2% on the month.

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