EUR/USD drops further to 1.1810 on softer EZ CPI
- Sold-off into horrible German retail sales.
- Bears target 1.1800.
- Focus shifts to the US core PCE figures and Fedspeaks.
The selling pressure behind the EUR gathered steam on the release of the Eurozone flash CPI estimate, knocking-off the EUR/USD pair to the lowest levels in six days just ahead of the 1.18 handle.
At the time of writing, the spot recovered some ground to trade near 1.1820 levels, still down -0.24% on the day.
EUR/USD: 100-DMA tested at 1.1804
A below estimates Eurozone CPI report for the month of November added to the weight on the common currency, which was already hammered on the back of the worse-than-expected Germany’s retail sales data.
European Monetary Union Consumer Price Index (YoY) came in at 1.5%, below expectations (1.6%) in November
European Monetary Union Consumer Price Index - Core (YoY) registered at 0.9%, below expectations (1.1%) in November
Meanwhile, a renewed rally seen in the USD/JPY pair triggered a fresh bout of buying interest around the US dollar across its main competitors, which exacerbated the pain in the main currency pair. The USD index jumps +0.20% to print fresh daily tops of 93.46 levels.
With the Eurozone inflation data out of the way, all eyes now remain on the US jobless claims data, core PCE price index and Fedspeaks due later today for fresh trading impetus.
EUR/USD Technical Levels
Karen Jones, Analyst at Commerzbank, noted: “EUR/USD has stalled just ahead of the 78.6% retracement at 1.1976 and has sold off towards the near-term uptrend, today at 1.1824. While this holds immediate upside pressure is maintained, however a close below here and preferably below 1.1712 the recent low is needed to alleviate immediate upside pressure. The intraday Elliott wave counts are negative and downside risks are growing.”