Yesterday, the euro maintained a steady range against the US dollar after both the Eurozone and US released economic data that showed a mixture of results. In June, German ZEW economic sentiment figures fell short of projections, while US retail sales data for May failed to meet market expectations. Overall, the EUR/USD pair traded in a range of 1.0710 and 1.0749 in the past 24 hours.
According to the final data published by Eurostat, the Eurozone consumer price index rose by 2.60% y-o-y in May, following a 2.40% rise in the previous month. The initial estimates had pegged the Eurozone’s annual headline inflation at 2.60%. Economists had anticipated no change in the initial estimates.
Notably, the Eurozone’s annual inflation was 6.10% in May 2023.
The increase was led by a 1.83% y-o-y increase in the price of services in May. Likewise, the prices of food, alcohol, and tobacco rose by 0.50% in the same period. Non-energy industrial goods and energy prices grew by 0.18% and 0.04%, respectively.
Excluding volatile items such as energy, food, alcohol, and tobacco, the Eurozone core annual inflation was 2.9% in May 2024, up from 2.70% in the previous month. The preliminary estimate pegged the core annual inflation at 2.90%. Economists did not anticipate any change in the preliminary estimate.
The German ZEW economic sentiment index improved to 47.50 in June from 47.10 in the previous month but missed forecasts of 49.60. However, the indicator reflecting the assessment of the country’s economic situation declined to -73.80 in June from -72.30 in May.
Furthermore, the financial market experts’ sentiment index reflecting the economic development of the Eurozone rose to 51.30 in June from 47 in May, surpassing forecasts of 47.80.
However, the Eurozone situation index was -38.60 in June, unchanged from the previous month.
As reported by the US Census Bureau, the country’s retail and food services sales rebounded with a growth of 0.10% m-o-m in May to C$703.10 billion following a 0.20% decline in the previous month but missed forecasts of a 0.30% increase.
The increase was led by a 2.80% m-o-m rise in the retail sales of sporting goods and hobby stores. It was partly negated by a 1.10% decline in sales at furniture and home stores.
On a y-o-y basis, US retail sales rose by 2.30% in May 2024.
Notably, US retail sales surged 2.90% between March and May 2024 compared with a similar period last year.
Also, US retail trade sales inched up 0.20% m-o-m in May. On a y-o-y basis, the country’s retail trade sales grew by 2% in May 2024. The non-store retailers recorded an increase of 6.80% y-o-y in May 2024. Likewise, food services and drinking places posted a growth of 3.80% in the same period.
Excluding autos and gas, US retail sales inched up 0.10% m-o-m in May, after a 0.30% decline in April, but missed forecasts of a 0.40% increase.
The mixed economic data from both countries is expected to keep the EUR/USD pair range bound in the short term.
Technically, the EUR/USD pair is rising after testing the support at 1.0710. The next resistance is anticipated to be only near 1.0850. Additionally, the currency pair is trading above its 50-day moving average, while the MACD indicator is showing a positive reading. Therefore, we anticipate the EUR/USD 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.
