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.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.