The euro remained range-bound against the Aussie yesterday following the release of mixed economic data from both Europe and Australia. While Australia’s retail sales fell sharply in December, those in the Eurozone also declined steeply in the same period. Notably, the Eurozone Sentix investor confidence index improved sharply in February. However, this was not enough for the euro to gain ground against the Australian dollar. Overall, the EUR/AUD pair traded between 1.5540 and 1.5630 in the past 24 hours.
According to the data published by the Australian Bureau of Statistics, the country’s retail sales fell by 3.90%m-o-m in December to A$34.47 billion, following a 1.70% increase in the earlier month. The reported reading matched the flash estimate. The economists did not anticipate any change in the flash estimate. The reported figure represents the first decrease in retail trade for last year following eleven consecutive monthly increases.
Department stores declined by 14.30% in December. Likewise, clothing, footwear, and personal accessory retailing fell by 13.10% in the same period. Household goods retailing dipped by 7.80%. On the contrary, food retailing grew by 0.30% in December.
In volume terms, retail sales declined 0.20% q-o-q in the December 2022 quarter, reflecting the first drop in five quarters.
According to Destatis, the German factory orders rose by 3.20% m-o-m in December following a decline of 4.40% in the previous month and greater than the 2.10% growth forecast by economists. Excluding large-scale orders, the decline was 0.60% in December.
Domestic and overseas demand grew by 5.70% and 1.20%, respectively. While fresh orders from the Eurozone rose by 9.80%, orders from the rest of the world increased by 3.80%. Intermediate goods orders surged by 9.70%. In the meantime, fresh orders for the consumer goods sector contracted by 3.30%.
On a y-o-y basis, German factory orders plunged to 10.10% in December 2022.
The Eurozone Sentix investor confidence index improved for the fourth consecutive month to -8 in February from -17.50 in January and surpassed forecasts of -12.90. The reported reading is the highest since March 2022. The current situation index also rose for the fourth month in a row, to -10 from -19.30. Overall, the expectations index increased to -6 in February from -15.80.
In the USA, investor confidence rebounded to positive territory with the index at 3.60 in February, reflecting the highest level since April 2022, up from -3.50 in January. The current situation index rose to 9 from 4.30. Also, the expectations index improved to -1.80, representing the highest level since February 2022, from -11.
With regards to Asia (excluding Japan), the Sentix investor confidence index surged for the fifth successive month to 11.70 in February from 1.40 in January. The reported reading reflects the highest level since February 2022. The current situation index recorded its third successive increase, to 7.50 from -4.30. Also, the expectations index jumped to 16 from 7.30.
The Eurozone retail sales fell by 2.70% m-o-m in December following a 1.20% rise in the prior month and worse than forecasts of a 2.40% decline.
The mixed economic data is expected to keep the EUR/AUD pair range-bound in the short term.
The historical price chart indicates that the EUR/AUD pair is rising after testing the support at 1.5440. The next resistance is anticipated only near 1.5730. Additionally, the currency pair is trading above its 50-day moving average while the stochastic indicator is in the bullish zone. Therefore, we anticipate the EUR/AUD pair to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
