Forex Trading: EUR/USD Pressured By Weaker Data Once Again

Overnight Eurozone Retail Sales fell by a greater than expected 0.8% (-0.4e)for the month.  The YoY came in at -2.1% versus a year ago. This was also weaker than expectations (-1.5%e).  In addition, the PMI Service index came in at 42.5. this was donw from the previous estimate of 43.5.  This is a new low for the index.

The EUR/USD was sold off on the increasingly bearish news.  The ECB will of course meet tomorrow and although most think a greater than 50 basis point cut is warranted, the rhetoric from the ECB is that the cut will be 50 basis points.

Nevertheless, the EUR/USD fell off the weaker data.  The pair reached a low of 1.2601 as New York entered.  This was lower than the previous London low of 1.2606.  However, the price bounced from this level, suggesting some support at the lower level (the weak US data took some of the attention away from the EURO for the time being I guess).  The 1.2600 level will need to be breached given the bounce for the pair to move lower.  Watch this level of course.  On the topside the 1.2634 level is trendline resistance currently on the 5 minute chart.  The trendline will be watched by intraday technical traders (see chart below)

The pair is below the 100 hour moving average, which is bearish for the pair.  However, it remains contained by a wedge/triangle formation, as consolidation continues.  The upper trendline comes in at around 1.3000.  The lower trendline comes in at around 1.2450.  This suggests a non-trending market and continued up and down movements.

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