Euro bulls take control after weak US retail sales data
Greenback tested key resistance around $1.10 against euro earlier in the week but failed to break through. Sterling at 10-day high on news that Brexit Party may further reduce challenge to Tories
The US dollar is sliding after weak retail sales data from October, which also revealed that September sales were weaker than previously reported. The greenback moved higher in the first part of the week against the euro, testing the critical $1.10 resistance level multiple times but failing to break through.
The euro bulls have now taken control and were pushing EUR/USD past the $1.1050 level in morning New York trade.
US retail sales for October were in line with expectations, showing a 0.3% gain, but September sales were revised down and the October sales ex auto and gas rose an anemic 0.1%.
There were also a slew of more minor reports that all showed a weakening US economic picture. Manufacturing and industrial production fell sharply in October, confirming those sectors of the economy are in recession. Capacity utilization fell by more than expected last month.
This all gave the euro bulls a handle they could hold on to, providing an impetus to take EUR/USD higher after US dollar bulls tested the critical $1.10 level repeatedly earlier in the week.
EUR/USD is still trading in the rough band of $1.10 to $1.12 its been in since early October, and the longer it stays within this band the greater the chances the euro will again test the $1.12 level again with strength on the upside.
Sterling Jumps on Brexit News
GBP/USD traded at 10-day highs after a report in a top British newspaper that Neil Farage’s Brexit Party would stand down in over 40 additional Scottish ridings to allow for a greater chance of Tory candidate success. Sterling got a big boost early in the week when Farage announced Brexit Party would not challenge the Tories in ridings where they already hold seats.
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