- The dollar reacts without clear direction to bad retail sales data.
- EUR/USD confirms daily losses, manages to hold above 1.1430
The EUR/USD remains in negative territory on Friday although for the moment it manages to hold above 1.1430. The pair hit a two-day low after the release of worse-than-expected US economic data at 1.1432, though it has since rebounded and is trading just below 1.1450.
The dollar had a mixed reaction after the release of the US retail sales report for December, which surprised with an unexpected drop of 1.9%. It was the worst month since February 2021.
The possible weakness of the dollar due to the data and the drop in Treasury yields is overshadowed by the decline in equity prices in Europe and on Wall Street. The Dow Jones points to an opening with losses of 0.80% and the Nasdaq of 0.90%.
More US data will be released on Friday, culminating in consumer confidence from the University of Michigan.
The bullish bias remains firm in the EUR/USD but in the very short term the signs in favor of a correction are increasing. The pair failed to break above the 1.1480/85 zone again. A return above 1.1460 could change the intraday negative bias.
If we lose 1.1430, an acceleration to the downside could take place with a possible initial target at 1.1405. Below the next strong support lies at 1.1380.