When a top-tier indicator beats expectations and all the revisions are also in the black, the currency reacts. US retail sales beat expectations on all the different headline and core measures in July, whilst June’s numbers were revised higher.
The US dollar reacted positively and for the euro, it means a drop under 1.17. The low so far is 1.1693. A key level is 1.1710, the swing high of 2015 that also served as a separator of ranges recently.
Further support awaits at 1.1620, which was the high level in 2016 and remains relevant. The break awaits confirmation but the US dollar certainly has momentum. It had already begun the week on a positive tone, very different from the previous week.
The data coming out from Europe has been OK, but not exciting. Germany reported a growth rate of 0.6%, a robust figure but below 0.7% expected. It was countered by a minor upwards revision. The euro-zone will release updated GDP numbers tomorrow. Many European countries are on holiday today.
The next big event for markets is the FOMC Meeting Minutes released tomorrow. It could determine if the pair extends its drops or recovers.
More: Is EUR/USD still overbought?
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