EUR/USD Overlooks Eurozone Retail PMI As ECB Meeting Looms Ahead

Talking Points:

• Eurozone Retail PMI (August): 45.8 Actual Vs 47.6 Prior.
• EUR/USD Firmly below 1.3200 and Overlooks Eurozone Retail PMI Data..
• Looking Ahead ECB Rate Decision and Press Conference from Mario Draghi.

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The August Eurozone Retail PMI came in at 45.8 compared to the prior month’s reading of 47.6. It was the lowest reading in 15-months and missed market expectations calling for 47.6. The Euro remained relatively muted against the US Dollar as traders may see this economic data as less significant in the upcoming monetary policy decision. EUR/USD remained firmly below the critical 1.3200 level.

Being watchful ahead, the much anticipated September European Central Bank (ECB) Rate Decision followed by ECB’s Chief Mario Draghi Press Conference will take center stage at 11:45 and 12:30 GMT respectively. Market seems to be prepared for an expansion of stimulus subsequent to the dovish rhetoric made by Mario Draghi at the Jackson Hole Symposium last month. On that note, DailyFX Currency Strategist Ilya Spivak suggest for a possible disappointment, which would come against a backdrop of heavily skewed anti-Euro positioning.

Taking technical analysis into consideration, Ilya Spivak mentions near-term support to rest at 1.3104 (September 2013 low) and near-term resistance at 1.3151 (76.4% Fib Expansion). He is short EUR/USD at 1.3644 in line with his long-term fundamental outlook. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the EUR/USD stands at 1.85 as 65 percent of traders are long.

EUR/USD 5 Minute Chart

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Edward Hyon, DailyFX Research Team

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