EUR/USD Breaks Below 1.3600 Ahead Of The Eurozone Retail PMI Figures

Talking Point:

• Eurozone Retail PMI: 50.0 Actual Vs 52.8 Estimated; 53.2 Prior.
• Germany Retail PMI: 56.2 Actual Vs 52.8 Estimated; 53.5 Prior.
• EUR/USD Drops Below 1.3600 Level Ahead of the Release. .

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The Eurozone Retail PMI, which tracks month-on-month changes in the value of retail sales, registered at 50.0 for the month of June. This was marginally higher than the prior reading of 49.9 in May. Germany remained the powerhouse in the Eurozone retail sector as its retail PMI came in at 56.2, accelerating from 52.5 in the prior month. Meanwhile, France and Italy acted to offset this healthiness as their retail PMI figures crossed the wires at 47.6 and 43.8 respectively. This is a reading below 50.0, which indicates a contraction.

Ahead of the data, EUR/USD lost ground breaking the psychologically important 1.3600 level to trade almost 20 pips lower. There has been a string of disappointing economic prints this week, from the region, amid the European Central Bank keeping its key policy rate at 0.15 percent as expected on Thursday. ECB Governor Mario Draghi announced no further stimulus at this point as the central bank assesses the impact of its recently revealed TLTRO program. Any further hints on future stimulus expansion would likely bode ill for the Euro says DailyFX Currency Strategist Ilya Spivak.

From a technical standpoint, near term support rests at 1.3500 and resistance at 1.3700 says DailyFX Currency Analyst David De Ferranti. Moreover, DailyFX Senior Currency Strategist Kristian Kerr has noted a move below 1.3590 will turn us negative on the exchange rate.

EUR/USD 5 Minute Chart

Chart Created Using FXCM Marketscope 2.0

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Edward Hyon, DailyFX Research Team

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