EUR/USD Under Pressure Despite Eurozone Retail Sales Rebound

7 paź

This morning, the Eurozone Retail Sales data showed a slight rebound, rising 0.8% year-on-year (YoY) in August, compared to the 1.0% estimate. On a monthly basis, retail sales increased by 0.2%, aligning with expectations, after being flat in July, according to data released by Eurostat. While this rebound reflects some recovery in consumer activity, the data missed market expectations, which has limited its impact on the Euro.

Despite these figures, the EUR/USD pair remains under pressure, largely due to stronger sentiment surrounding the US Dollar. The economic data from the Eurozone was marked as low-impact, further minimizing its influence on the currency pair. As a result, the price of EUR/USD continues to feel the weight of broader market forces.

Sentiment Analysis: COT Report Shows Divergence
The latest Commitment of Traders (COT) report reveals an interesting shift in market sentiment. Retail traders have turned bearish on EUR/USD over the past week, likely reacting to the stronger USD performance and weaker-than-expected Eurozone data. On the other hand, Smart Money (institutional traders) has begun building long positions, suggesting a potential upside as these large market participants start positioning for a future rebound.

Technical Outlook: Eyes on the 1.08500 Demand Area
We previously closed a bearish position on EUR/USD after a successful trade, as noted in our forecast here:

EUR/USD Previous closed Forecast.

Looking forward, we are awaiting further price action before considering new positions. The 1.08500 level is a key demand area where we expect the price may find support and possibly reject the previous low. A decline to this area seems likely, and we are watching closely for consolidation and potential entry signals around this level. At the moment, however, we remain on the sidelines until a clearer opportunity presents itself.

Conclusion
While the Eurozone Retail Sales figures showed a modest rebound, they missed expectations, and the overall impact on the EUR/USD pair has been minimal. The pair remains under pressure, with the USD benefiting from recent economic data and hawkish remarks from the US Federal Reserve. We are watching for a potential price drop to the 1.08500 demand area, where a rebound could occur, but no new positions will be taken until the market offers clearer signals.

For now, patience is key as we wait for EUR/USD to reach an area of interest that may provide a solid entry point.

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